U.S. Wages Going Backwards

I hope that Wall-E is your favorite movie and Lil Wayne is your singer crooner rapper because your paycheck has gone back to 2008. The average salary for U.S. company workers has been reset to early 2008 levels according to data cited by Xconomy. According to data from PayScale, a Seattle-based firm that collects compensation data, the national trend  shows that U.S. wages grew 5.4 percent from 2006 through the end of 2008. Wages decreased by about 1.4 percent during the recession in 2009, reaching their lowest point in the third quarter of that year. Average U.S. earnings have been pretty flat throughout 2010, roughly matching the level of the first quarter of 2008.

Quarterly Compensation Trends for National (US)

In Detroit the trend since mid 2008 has been more volatile than the U.S. trend (not unexpected). Wage increases in Motown were sluggish in 2007 and 2008 then in 2009 the bottom fell out of the car business and salaries followed. As of Q3 2009, the average wage in Detroit had dropped 3.1 percent from its peak in Q4 2008 according to PayScale. Pay in the D was up 1% in Q1 2010, down in Q2 and Q3 2010, and up again Q4 2010, with a net yearly wage increase of 0.4% over 2009.

Chart of the Day has another look at the sorry state of the economy. Their latest chart of the day illustrates the percent increase in the number of jobs for every decade since the 1940s. Today’s chart illustrates that up until this millennium, the number of jobs at the end of a decade has always been at least 20% greater than 10 years earlier. During the last decade, not only was that 20% plus growth not achieved, the decade actually ended with fewer jobs than when it began. This negative job growth is particularly noteworthy because the US population had increased by 10% as well as a significant increase in global wealth during the same time frame. With one year down in the current decade the chart illustrates that job growth is positive albeit only slightly so. If job growth during the current decade were to increase at the same pace as what occurred during the first year of this decade, the decade would end with an 8.7% gain in jobs.

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The Motor City is infamous for the bumpy financial road it has ridden. While other towns, like Houston, Tex., saw wage gains 70 percent higher than the national average between 2006 and Q1 2008, Detroit trailed national wage growth by 60 percent over the same period.

Though wage increases in Detroit were sluggish in 2007 and 2008, reflecting turmoil in key industrial sectors like automotive manufacturing, the bottom fell out in 2009. As of Q3 2009, the average wage in Detroit had dropped 3.1 percent from its peak in Q4 2008.

Detroit pay did rally a bit in Q1 2010, rising about 1 percent above the previous quarter. This was followed by a downward trend in Q2 and Q3 2010, but the year ended on a bright point, with Q4 2010 wages up more than 1 percent over the previous quarter and up 0.4 percent over a year earlier.

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