Research shows the US is a low wage country

(MoneyWatch) Recent research from John Schmitt of the Center for Economic Policy Research shows that the US leads developed countries in the share of workers earning low wages. The research also shows that increased wage polarization over the last several decades is one of the reasons for the large share of low wage-work in the US.

The bars in this graph represent the share of workers in low wage work, where low wage work is defined as employees earning less than 2/3 of the median wage (approximately $10 per hour or $20,000 per year). In this category, the US leads among developed nations:

John Schmitt

The next graph shows that the share of employees earning low wages has increased from 22 percent in 1979 to 28 percent in 2009. Thus, we have more people at the extremes of the distribution, and fewer in the middle. This helps to explain why the US has such a large share of workers engaged in low wage work:

John Schmitt

The bottom line is that there are two big issues facing US labor markets. The first is getting people back to work as soon as possible. The unemployment rate is still far too high, and our most immediate problem is providing jobs for the millions of people who are still seeking work. But there is also the the problem of reversing the trend toward increased wage polarization. This will require the creation of middle class jobs that are at least as good or better than jobs that existed in the past, something that is much easier said than done.

[credibility2]

As long as the U.S. continues to lag behind other nations in math and science, increases in our population of the deficit-educated will continue to translate to people with lower wage jobs.

[AnotherVue]

Recent research is 2009? There is some seriously fuzzy math at work in this "research". How can only 4% of Belgian workers fall into the low-wage category, when the median income for Belgium in 2011 was $21,532? Also, what is the breakdown of low wage earners who are full-time vs. part-time?

[Ganon1]

Fuzzy math? First thing you need to understand about averages is that they say nothing about the distribution (which is what this economist is discussing). So... folks who earn much more at the top of the distribution will push up the 'average' even if the average isn't very average :)


Second, you are looking at net disposable income.

Gross 'average' income in the US was 52,607 (in USD) in 2010, and it was 43,023 (in USD) in Belgium.

Next, taxes. The 'average' tax burden in the US was 22.9%, while it was 42.1%.

So... to recap, the 'fuzzy math' is wholly attributed to your failure to understand that averages obscure the distribution, and your challenge to this article dealing with that distribution employs a statistical average that not only obscures that distribution, but it also doesn't account for differences in taxation.

Imagine that: a reputable economist is more trustworthy than an anonymous internet poster. What is the world coming to?

[SaveRMiddle]

The data from 2010 and 2011 will make it easier to understand why there is "slow growth". IMHO, this recession has permanently destroyed the strength of our consumer base far greater than the BLS formulas/snapshots have captured.