Why has Pay Not increased at same rate of Inflation??

Question

When I go to the grocery store, I see that food has become extremely expensive, especially if you want to buy healthy food such as fresh fruits and vegetables.

However, I have been looking for a Part-Time job while I'm in school and I have found that the average pay is about the same as it was 8 years ago. They still hire people and want to pay $8-10 an hour for administrative assistant jobs. They offered the exact same pay in 1998 when I first looked for my first job. In fact, my first job I got paid $8 an hour.

What kind of economy is this where the prices keep going up for everything but the average pay for most people hasn't moved??

Answer 1

I'll offer an explanation, not an excuse. Wages and food prices are determined by the market (anticipated transactions between purveyors of good and labor, and those wishing to purchase it), which is an amoral mechanism.

This is a troubling phenomenon, but it exists nonetheless. From the firm's perspective, costs of business must be mitigated and yet costs have gone up for a number of reasons, including health care premiums, energy expenses (gas prices hit trucking harder than they hit motorists, and that price increase is passed on to the final consumer) and legal expenditures. However, wages are a cost of business and, as such, have not been forced up as much. Indeed, wages are often the largest portion of a business' expenses (the purchase of merchandise is not considered an expense but rather cost of inventory), and hence have been controlled tightly.

Meanwhile, laborers (and consumers) often lack the clout to force a political solution, especially with the decreasing effectiveness of unions and the decline in organization of labor.

Finally, pay for part-time work will always be low because there is low elasticity for those kinds of work - a very large market of willing laborers, easy entry and exit, and no need for long-term employment within those jobs themselves. Thus, raising or cutting pay will not change drastically the number of people seeking work, and hence firms will keep wages low.

Note the opposite is true for highly-skilled and highly-educated labor, such as professional advanced degrees (CPA, MSEng, etc).

You ask what kind of economy this is where prices go up but part-time pay does not? It is an economy where most workers aren't part-time, where many workers are in industries enduring structural change (becoming more efficient by trimming the number of workers, forcing people to find work elsewhere), and where measures of inflation do not take into account that consumers can change their preferences (ie, shop via co-ops instead of chain food stores, change consumption from beef to pork or bananas to apples, etc). And ours really isn't that bad compared to many other nations. Inflation is a phenomenon most of us will contend with at some point, although I'll take 3% annual inflation over 15% (general rate in much of the developing world and some parts of Europe).

Answer 2

The answer is complex question. Wages can stay flat, but purchasing power for the worker can increase how? For example a DVD player in 1999 was $300 you made $10 an hour, but by 2007 DVD player can get new for $50. Certain products got cheaper like Food, Transportation, electrionics in the last 20 years. Yet, Housing, healthcare price rose above inflation for all workers, so the answer is complex and convulted actually to why pay doesnt rise with inflation. If you flip burgers at McDonalds for $7.00 an hour no matter how good the economy is doing there always people at the low skill end of the job market willing to do for $7.00 or less every year.
As one person said, about the MBA, or Physican there are less of them in the market available, so with limited supply of professional workers will naturally get a higher wage.

Still, wages can remain flat for certain workers, but purchasing power can go up with goods become cheaper overtime. The goverment really want to increase the pucharsing power of workers would be reduce to healthcare costs below inflation, but that still is not possible with more, and more people needing healthcare as they retire. Its a complex answer acutally to the question.

Answer 3

next time write : why has pay in such and such jobs in such and such country not increased at the same rate as good price inflation from 1999 to 2007.

Pay as increased lots in parts of China for instance.

And that may be part of the reason why pay is not moving some billions asian farmers and workers are looking for jobs, asian currencies are held by their government below their real value this makes asian products cheap, competition bars a rise of wages in the western world.

On top of that anti union policies bar rises in wages

On top of that wage earners can borrow now that credit is deregulated, they don t need wage increases, all they need is a little more debt

Answer 4

people who don't comprehend the cost of an knowledgeable society want some training themselves. people who ***** that the backside 40 seven% pay no federal earnings taxes are ignoring sales taxes, payroll taxes and particular, even sources taxes. and that they don't comprehend that one hundred% of what that 40 seven% has is decrease than 10% of what the a million% has. Why do they desire to take it? yet necessary, state-presented public training has carry approximately a much greater reported and rich society. all of us earnings from that. it extremely is a pity some human beings desire to stop it.

Answer 5

min wage is going up this next year

Answer 6

I think you are not working hard enough. Make yourself more marketable and you'll be making more.

try harder