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Labor Day report finds troubling trends in Michigan wages

Published 3:02pm Friday, August 30, 2013

Michigan’s low- and middle-income workers are more squeezed than their counterparts 30 years ago with a decline in inflation-adjusted wages over the years, a new Labor Day report concludes.

Workers in Michigan made the least progress in wages over the period than all states except for Alaska, and the report finds a startling 24-percent decline in the median wage for African American workers over three decades compared with 1 percent decline for white workers, when adjusted for inflation.

Increasing the state’s minimum wage and making postsecondary education and training more accessible are ways to turn the trends around, according to the “Labor Day Report: Michigan’s Paycheck Blues,” released by the Michigan League for Public Policy.

“Wages are an important gauge of the health of an economy. We all want Michigan to be a state where hard work is rewarded,’’ said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy. “When wages are low, the economy suffers, putting a strain on public assistance programs while generating less revenue to maintain public structures and needed services.’’

Only those workers at the top have experienced gains since 1982. Workers earning the most (those in the 90th percentile earning $38.25 an hour) are able to purchase 22 percent more than workers in the 90th percentile in 1982.

Workers in the 50th percentile, or the median wage, however, saw a 7-percent decline in purchasing power between 1982 and 2012.

Those workers experiencing the worst decline were African American workers. In 2012, white workers earned $4.20 an hour more on average than African American workers, the largest disparity over three decades.

Gaps in education levels and the concentration of African American residents in high-poverty areas with little access to employment are among reasons that may be driving the growing disparity.

“For us to prosper we need an economy that works for all. Growing wage disparities threaten the economic health of all of us,’’ Jacobs said.

 

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