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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

(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.

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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.
(Read more recession stories.)

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