Why are salaries not keeping up with the pace of Inflation?

Question

I was helping my niece look for a job the other day and I saw that companies are still paying the exact same starting salaries they were paying 10 years ago when I was her age looking for a job.

The average pay offered is between $10-11 for a half-way decent job exactly the same as it was in 1997. I remember it clearly.

Are people today poorer than they were 10 years ago?

Answer 1

People today are poorer. The reason? GLOBALIZATION.


Lower and middle income Americans see very minor benefits in Globalization. The only one being that a space heater at Wal-Mart may cost $24.95 instead of $39.95.

The long term losses the lower and middle class has to endure due to Globalization are far greater than the sporadic little savings they get in return from buying a cheaper small appliance.

Globalization only benefits the rich, since they are the ones who own most shares and corporations. Those corporations see an increase in revenue because they suddenly see huge markets and huge labor forces willing to work long hours for little pay.

The dirty little secret about Capitalism is that someone has to be poor in order for someone to be rich. In the past, the poverty was conveniently shifted to other countries - out of our sight. However, with Globalization, poverty will shift back to the West as wealth increases in poor countries.


While some wealth is shifted to those formerly poor countries like China and India, it has an opposite effect on Western nations in that it takes away the labor advantages those countries once held. Westerners are having to more and more compete for jobs with 3rd worlders. And when the Westerner does get the job, he gets less money.

What will gradually happen on a global scale is that historically wealthy countries, located in the Northern Hemisphere, will begin to create their own large segments of poor within their own countries.

And it will not just affect the "uneducated." It will affect people with skills as well, although they now feel as if they are not affected by it.

You can go to India, for example, and get plastic surgery or hair transplantations done for 1/5 of what you would pay in the US. Even heart bypass surgery for 1/30 of the cost in the US.

Eventually, even physicians and other skilled workers will have to compete with the 3rd world.

Most people will lose. The only winners are Multi-national corporations and those people in the 3rd world that now have your job.

Answer 2

Yes, Americans are definitely poorer now than they were ten years ago. The Federal Reserve is zapping the value of the U.S. dollar. Huge deficit spending in Washington D.C. on the bogus war on terror gives the Reserve an excuse to print billions of dollars, virtually out of thin air that they "loan" to the American taxpayer (plus high interest).

The more dollars that the Reserve puts into circulation, the less the value of each dollar already in existence. We are being screwed by the bankers that run the Federal Reserve.

Answer 3

In many industries, Salaries are going up way faster than inflation.
Thats the way it's been for 100 years.
In todays world, you better have some special skills and move toward jobs in growth industries.
Why would someone pay more for a job 100 people could do if you quit?
Try, Computer software and Programming, Service industries, Internet Marketing ect...
There are a larger % of American working in small companies, almost 70%, than large corporations now, because they no longer want fixed salaries. They want to build Wealth.
I have not had a "Salary" in over 25 years. But I have found my little niche, and built something from the ground up.
Thats where the business is gonna go from now on. The days of "Salaries" and Gold watches are over my friend.

Answer 4

This is mostly not true. It may be true in your nieces case, but on average, wages have increased quite a bit since 1997. Look at the census data I've linked to below for household income.

In 1997, the poorest 20% of households were making about $4,700 less than in 2005 (the last year of data). Of course, that's ignoring the effects of inflation. However after factoring inflation into the mix, the 2nd table shows the poorest 20% of households doing about 3% better in real gains. Middle class income groups show slightly better gains.

So to answer your main question, salaries are keeping up and we are doing better.

Answer 5

wouldn't we all be happy if McDonald's spent a couple of million less on advertising and gave all the employees a little more

that's just a example

but would we all forget about them if we didn't see 10 commercials a day from them,

i don't think so

hey Ryan with the ever increasing price of college , not to many people are able to afford college, but at lest those college deans are getting up to a million dollars( last year 10 deans were reported to be making over a million) a year and free housing , so i guess they are happy, and that is all that matters to them

Answer 6

what matters to me is what my salary buys. and it sure buys less than it did ten years ago. i don't need some cooked figures to show me that. why do we get the brainwashing about the economy? why does the government let these fat cats move jobs out of the country.
bush want to pass the amnesty bill. let all the immigrants in. they will all work cheap, and will be too scared to unionize. and our wages will go down as a result.

Answer 7

let's clarify, salaries for the CEOs etc are going up faster than inflation, ordinary folk get the shaft. What happens is corporate greed. I checked my old company and the starting salary there is the same as it was in 1995.
Upper management and CEOs get richer because they supposedly cut costs and are rewarding shareholders with higher dividend payouts, something that the ordinary person does not have access to. A majority of the people I know are struggling more now than they did 10 years ago.

Answer 8

Yes to your last question. Nearly everything substantial costs 40-100% more from 1999, yet a median average job, which the middle class and lower middle class rely on, pays about $10-12/hr. Too much competition from foreign invaders, as well as outsourcing to foreign workers on lower standards of living and plant shut downs. Ken C.... tsk tsk. No one cared how well off you must be. I'm fairly well off as well (which is why I have time to post here).

I care about my fellow Americans, as long as they are working, they should be reaping greater awards than their parents, but they seem not to be. I pay $25/hr to my employees, no fancy benefits. The work they do, would really get around 15-20. They are loyal, and hard working, and you really do get what you pay for. Some Americans have forgotten that.

Answer 9

I do not know what kind of jobs you are looking at, but I know my college friends who have graduated entering the job market are easily making double or triple those numbers.

What has happened in this nation is that the educated and the uneducated get what they deserve. The educated are rewarded while those who are not educated get nothing like they deserve.

Answer 10

The business heads and lobbyists have been getting more and more power over the last few decades, while workers rights are considered an increasingly "socialist" or "communist" agenda. In the 70's, CEO's earned about 30 times what their lowest paid workers earn. Now CEO's earn about 300 times what their lowest paid workers earn. That money has to come from somewhere.