Wages Falling Fast— and Might Not Come Back
This consequence of the recession hearkens back to Depression
By Evann Gastaldo,  Newser Staff
Posted Jan 11, 2011 9:30 AM CST
Job seekers search for jobs at WorkSource Oregon Friday, Jan. 7, 2011, in Tualatin, Ore.   (AP Photo/Rick Bowmer)

(Newser) – More bad news for the unemployed: You may very well return to the workforce, but it will likely be at a significantly lower wage than you were earning before. The Wall Street Journal offers up the stories of workers who went, in one case, from a $150,000-per-year money manager job to $8.85-per-hour Starbucks barista; in another, from a managerial position to a janitorial one. Even those who manage to remain in their original industry will likely face lower earnings.

This recession has seen one of the sharpest and fastest wage declines since the Great Depression. One study shows that more than half of the workers who lost long-term, full-time jobs reported earnings loss when they returned to the workforce; 36% said they were making at least 20% less. And many may never earn their pre-recession salaries again, says one economist. The good news: The ability to offer lower wages is allowing many employers to start hiring again, and could ultimately make the US more prosperous.

 

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