Growth not flowing into wages

Continued economic recovery, in Utah and across the nation, has meant low unemployment levels and high productivity. It has not, however, meant more money in workers' pockets, according to a pair of reports released Thursday.

"Most of this growth has flowed to profits, not into paychecks. It's been much more evident in financial markets than it has on the factory floor," said Jared Bernstein, an economist for the Economic Policy Institute, whose State of Working America report shows stagnant wage growth for low- and middle-income workers throughout the United States.

Hourly wages for middle-income workers increased a mere 3 percent between 2001 and 2003, with virtually no growth in the past four years.

Economic progress, Bernstein said, has "hit Wall Street but not Main Street."

The outlook is not much brighter for Utah workers, according to a Thursday report by Voices for Utah Children, prepared to coincide with the release of the EPI report.

Findings from the pair of reports run contrary to historical patterns, researchers noted. Six years of rising productivity and a competitive job market — in the nation and particularly here in Utah — would typically mean more monetary rewards for workers.

"There hasn't been the sort of pressure on wages like you would expect," said Allison Rowland, director of budget and research for Voices for Utah Children. The reports point to factors such as foreign competition, the monopoly power of large employers and the decreased power of labor unions.

At $13.27, Utah's median hourly wage remains lower than that of the nation and of other Western states. Additionally, the report states, 80 percent of Utah workers have actually lost ground when their earnings are adjusted for inflation.

At the same time, private company profits in the state have grown 32 percent between 2001 and 2005, compared to 30 percent net growth nationally.

"It's a great time to be in Utah if you're a company," Rowland said.

The total number of jobs in Utah has increased by nearly 500,000 over the past two decades, the Voices' report states.

Unfortunately, researchers found, many of those new jobs don't pay enough to support a family, evidenced by the high rate of Utahns entering the work force. In Utah, 72 percent of residents between the ages of 16 and 65 participate in the labor force, compared to 66 percent nationwide.

Younger workers, ages 16 to 24, and women are more likely to work than their counterparts across the country, setting aside the age-old stereotype that Utah women are in the home rather than the workplace, Rowland said.

Although a gender gap still exists, both reports indicate that women have fared better than men in the past 6 1/2 years in terms of wage growth.