By Isaac Cohen*
Every first Monday in September Labor Day is celebrated in the United States. This year, the economy is performing strongly, with a rate of growth of 4.1 percent in the second quarter. For the year as a whole, the Congressional Budget Office projects 3.1 percent growth, stimulated by increased government spending and tax cuts. Low inflation and almost full employment characterize the last leg of the economic expansion, which will soon reach 10 years, one of the longest on record.
Amid these positive numbers one indicator is lagging, revealing workers do not have many reasons to celebrate. The Labor Department in August said inflation reached 2.9 percent, between July 2017 and July 2018, while wages increased 2.7 percent during the same period. This means that prosperity has yet to reach workers’ payrolls. According to the Economic Policy Institute quoted in The Washington Post (08/11/18), between 2009 and 2017, wages increased 6.9 percent for the top 10 percent of workers, while for the bottom 10 percent wages increased 7.7 percent, due to minimum wage increases. By contrast, in the same period, wages stagnated among those workers placed in between the previous two categories.
This reflects a deeper trend, whereby the portion of national income in wages and salaries has fallen from almost two thirds in 2001 to 58 percent today.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
