Wages Drop

On June 28^th the Bureau of Labor Statistics released its County Employment and Wages Fourth Quarter 2011 report.  The report states that the average weekly wage decreased by 1.7% to $955 from the fourth quarter of 2010 to the fourth quarter in 2011.  This decrease marks only the fifth wage loss since the Census began tracking the figure in 1978.  Olmsted, Minnesota experienced the greatest decrease in weekly wages amongst large counties, with pay dropping 21.3%.  In Olmsted the education and health services industries faced the most severe losses with a total wage decline of $287.3 million (-29.1%).

The large counties (population of at least 75,000) leading the way in employment gains were Kern, California; Fort Bend, Texas; Weld, Colorad; Williamson, Tennessee; and Utah County, Utah.  These counties had the highest percentage increase in employment, all of them seeing gains of at least 4.3%.  On a grander scale, the U.S. added 1.8 million jobs since December 2010, putting the national employment at 131.3 million.

Steve Jobs: The Most Underpaid CEO?

A debate has been growing regarding executive pay and performance. While many financial-research companies, such as Oberatt, hold that pay should be correlated with performance, this is often not the case.  For many companies in the S&P 100, the performance of the company does not necessarily impact the pay of the CEO. Obermatt, by calculating and comparing the profit and shareholder returns of companies, has compiled a list of the "most over- and underpaid" CEOs. Among the list of the most overpaid were Hewlett-Packard’s CEO, Mark Hurd and Ray Irani, the CEO of Occidental Petroleum. Steve Jobs was listed as the most underpaid CEO with Eric Schmidt of Google coming in a distant second.

Income Inequality Continues to Rise in OECD Countries

A recent OECD report shows that the wealth gap in most rich countries continues to grow wider, consistent with an upward trend during the past few decades. The Economist blogged: "The Gini coefficient, a measure of inequality in which zero corresponds to everyone having the same income and one means the richest person has all the income, increased by almost 10% from 0.29 in 1985 to 0.32 in 2008, for working-age people in OECD countries."

Changes in wages have benefited the top 1% of earners most, but relative gains are not limited to them, as "the pay of the richest 10% of employees has increased at a far greater rate than that of the poorest 10% of employees." Gains in technology, because they "disproportionately benefit...high-earning workers," have contributed to increases in income inequality. High earners tend to marry other high earners, which only exacerbates this growing inequality. In addition, "governments are doing less to redistribute wealth than they have done in the past."

The report, however, shies away from identifying globalization as the cause of increased income inequality. Instead, as summarized by the Economist, it argues that "one of the many reasons for the rise in income inequality is that more people are in work now (or at least they were before the financial crisis hit) compared with the 1970s."

Report Shows Annual Wages in Largest Occupations Relatively Low

A report from the U.S. Bureau of Labor Statistics (BLS) shows that in May 2010, most of the largest occupations--as measured by the number of people who hold those occupations--were low-paying when compared with the national annual wage average. The BLS Editor's Desk writes: "Of the 15 largest occupations, only general and operations managers, registered nurses, and elementary school teachers (except special education) had average wages above the U.S. all-occupations average of $44,410 annually."

General and operation managers earned an annual average of $113,100; registered nurses $67,720; and elementary school teachers, excluding special education, earned an annual average of $54,300. On the bottom end of the average annual wages among the 15 largest occupations were food preparation and serving workers, including fast food ($18,610); cashiers ($19,810); and waiters and waitresses ($20,790). These last three were among the lowest paying of all occupational groups, regardless of size.

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