The Paycheck Fairness Act was blocked by a Republican filibuster in the U.S. Senate this week. The Paycheck Fairness Act was a measure aimed at enforcing equal pay for women in the workplace. But data shows that while men make more than women on average, wages for men are declining faster than for women and wages in general have stagnated for 20 years.
Paycheck Fairness Act aims at wrong target
The standard Republican argument against the Paycheck Fairness Act was that it amounted to more big government meddling in private business decisions. However, in the last three years wage growth for all middle and low-income workers in the U.S. — not just women — has grown at less than half the rate it did before the Great Recession. Median wages for both men and women actually shrank in the year ending in June. Wages for men without a high school diploma and men with bachelor’s degrees both lost ground. Wage declines have affected access to credit for these demographic groups. To borrow money, they increasingly rely on short-term credit provided by the cash industry in the form of installment loans and unsecured personal loans.
The lost decade
Wage stagnation for U.S. workers began long before the Great Recession. According to a Washington think tank called the Economic Policy Institute, the economy expanded from 2002 to 2007 but wages fell. Wages improved in the early part of the decade on the momentum of the booming 1990s. But after the 2001 recession they never recovered. The gradual decline has affected just about everyone but the super-rich. Both high school graduates and college graduates made less in 2009 than they did in 2000.
The fruits of labor
As wages have declined, worker productivity has increased, leaving employees with little leverage for demanding a better deal. Labor economist Heidi Shierholz told MarketWatch the assumption that productivity and wages increase together started changing in the mid-1970s. With no real wage growth, Americans maintained their lifestyles by spending their savings and increasing their debt. The house of cards finally collapsed when the housing crisis nearly destroyed the U.S. financial system. Wall Street escaped unscathed and is earning more than ever. Meanwhile, middle and lower-income spending power continues to shrink.