Manufacturers Spring Into Job Anxiety Fray
New study says workers modestly better off
The conventional wisdom that American workers face mostly wage stagnation and job loss is largely a media-driven myth, according to a study by the National Association of Manufacturers (NAM) in Washington.
"Much of what we read about the troubles of workers is inflammatory and just plain wrong," says Jerry Jasinowski, president of the NAM. He blames the problem on political hyperbole "picked up by the media, a press that often suffers from a lot of economic ignorance."
"Job creation in the US has been extraordinarily positive, and, if measured correctly, compensation and wages have made workers modestly better off than in the 1970s," he adds.
The report does acknowledge that wage gains "have been lower for the past 25 years than in the previous 25." But the study notes that when all benefits are added in, "real total compensation rose by 14.4 percent" between 1980 and 1994, and 23.3 percent if the Consumer Price Index is adjusted 1 percent, as "most economists" think it should be.
NAM's study, Mr. Jasinowski says, also helps identify a number of problems in business that firms themselves need to remedy, including more corporate spending on education and training, forging more positive relationships with employees, and increasing exports to create even more jobs and higher pay.
In this report, the NAM wades into the middle of a complex economic and political debate in a presidential election year.
Worker anxiety has become a common topic in the past months. There's a strong move in Congress to raise the minimum wage. Patrick J. Buchanan, in his fight for the Republican presidential nomination, for months preached a fiery version of how imports and immigrants are lowering US living standards. Edward Kennedy (D) of Mass has weighed in recently on behalf of workers.
President Clinton, caught somewhat in the middle because he wants to take credit for a strong economy and for the millions of jobs the economy has created in the past four years, has at the same time been urging companies to treat their workers well.
The report sees two main factors behind worker anxiety:
*"Excessive" taxes. Government "lets the typical worker keep" 60 percent of earnings after taxes, while his or her parents got to keep "80 percent after taxes." The difference amounts to nearly "$9,000 for the median two-income family," the report states.
*Slow economic growth. "So far this decade," the report states, "the growth rate has averaged little more than 2 percent a year, one-third less than the average posted during the previous two economic cycles.... [This] accounts for around half of the wage shortfall of recent years."
The pairing of these two topics - high taxes and slow economic growth - by the NAM is, politically, also the gist of the Republican economic theme this election year.
White House response
Responding to the NAM white paper, Gene Sperling, deputy national economic adviser to the president, told the Monitor: "President Clinton feels the health of the US economy has improved dramatically, but, long term, wages have a long way to go. We also need more portable pensions, better health care, more training for workers.
"On the rate of growth of the economy, we differ from the Republicans in that we believe productivity and growth depend not just on increasing savings but also on the collective skills of the work force. So let's balance the budget, but let's also provide more training for our workers."
Jasinowski also says that economic reporting on wages has largely ignored the "important demographics" that have operated in the US over the past 25 years.
On this issue, the report states: "The growth of the labor force is clearly the most important factor. The post-World War II baby boom caused a massive influx of new entrants into the labor force.... [So] it becomes easy to understand why real wages have not grown as much in the past 25 years as in the previous 25 ... the labor supply was simply growing much more rapidly than the demand for labor."
The generation now entering the work force is "roughly one-third smaller [than the baby-boom generation]."
NAM also says the US is now "No. 1 in the world in competitiveness, productivity, exports, and the overall number of global industry leaders." It cites "revolutionary" changes in the way products are made" in the US as behind the rising of "America's economic sun."