Economics Faculty Hofstra College of Liberal Arts and Sciences Labor Studies Top Stories

An 8-Cent/Hour Raise Per Year is the Cost of Post-Recession Salary Paralysis on LI

Pay paralysis remains a problem in the US although almost six years have passed since the end of the 2008-2009 recession. The typical working person on Long Island only makes 75 cents more per hour than in 2005 – the equivalent to an hourly pay raise of just 8 cents more per year.

This and other findings about post-recession wage patterns on Long Island are the focus of “Pay Patterns on Long Island Since the Great Recession”, a new study in latest issue of The Regional Labor Review, published by Hofstra University’s Center for the Study of Labor and Democracy.

Among the findings in the study, authored by Gregory DeFreitas, PhD, director of the Center for the Study of Labor and Democracy:

·              Nationwide, for more than three decades, stagnant or falling pay has remained the frustrating norm for most working people. Across the country, the median wage has been stuck at about $17 or less (in 2014 dollars) for the past decade. As small as the increases have been, the lowest-paid 10 percent of workers has managed far slower wage growth (+2 cents a year vs. +8 cents a year).

Gregory DeFreitas (1)
Dr. Gregory DeFreitas

·              The Long Island gender gap has not narrowed over the past decade: full-time working women still earn 20 percent less per hour than their male counterparts. Pre-recession, women who worked full-time earned 81 percent of the median male wage, compared to 78 percent as much today.

·              Racial and ethnic earnings gaps have narrowed since the mid-2000s, but remain wide. Increases in the minimum wage have been particularly important in stemming wage erosion among lower-paid African American, Latino and immigrant workers.

·              Long Island’s college graduates today earn far more than less-educated workers. The median college grad’s wage is 51 percent higher than that of workers with no more than a high school degree and 37 percent more than those with some college education but no degree. However, even college graduates have experienced shrinking wages over the past decade – the median college grad wage fell by $4 per hour.

·              Jobs with union representation today average higher hourly pay than nonunion jobs in both the private and the public sectors. The union wage premium has been cut by over half in the private sector, but has increased in the highly unionized public sector.

Dr. DeFreitas said, “Even as the official unemployment rate falls, younger workers, women and even college grads still face pay paralysis or declines. The future of our region’s standard of living, job quality and business vitality depends on how soon we reverse these trends.”

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