More jobs, lagging pay: Rosier labor market still has families struggling

Despite data showing a 7-year low in unemployment, wages remain at a standstill for middle- and low-income workers

The U.S. unemployment rate dropped to 5.4 percent in April — almost half the 10.2 percent peak of October 2009, according to the Labor Department’s jobs report that was released Friday. The report shows that employers added 223,000 jobs in April, a significant tick up from the 85,000 added in March.

But despite the rosier economic outlook, for many employees in the workforce, an increasing number of those jobs aren’t offering sufficient compensation to sustain a family — highlighting decades of virtual stagnation in wage incomes.

Earning just $10.50 an hour at Walgreens drugstore in Chicago, De’Juan DJ Jackson, 23, and father of two, struggles to make ends meet, and his story, featured in Al Jazeera America’s “Hard Earned” documentary series, is not unique.

The median income has been more-or-less stagnant for more than 25 years. In 1988, the median U.S. household income was about $52,000 (adjusted). And that’s exactly where it remained in 2013 (the last year for which such figures are available), according to U.S. Census Bureau.

And as groceries, rent and other expenses continue to rise, many Americans are stuck trying to cover spiraling costs without a reciprocal increase in income, limiting opportunities for individuals and families to save up for a home, car or increase their standard of living.

And with times tight, any setback can push a family living paycheck-to-paycheck into poverty or homelessness. Jackson felt the blow especially hard when his home was burglarized, forcing him and his family to move in with his mother until he could save up enough to move into an apartment in a safer neighborhood.

“It was a huge blow when they came in our house and took all of our stuff,” Jackson said.

Cumulative change in real hourly wages of all workers, by wage percentile,* 1979-2013

* Low wage is 10th percentile, middle wage is 50th percentile, very high wage is 95th percentile.

Source: Economic Policy Institute

Income stagnation, however, has not been the reality for the country’s wealthiest people, who have seen their wealth consistently increase. The richest 1 percent have seen their annual pay grow 138 percent from 1979 to 2013, while wages for the bottom 90 percent grew 15 percent over the same period of time, according to the Economic Policy Institute (EPI). The wages for the middle-class has been relatively stagnant, with only a 6 percent increase since 1979. In contrast, high earners, those in the 95th percentile and above, have seen a 41 percent jump.

While most workers barely saw growth in their incomes, CEOs saw an astronomical income spike relative to their employees. As of 2013, company bosses earned almost 300 times more than their workers, according to EPI

CEO-to-worker compensation ratio, 1965–2013

The federal minimum wage, stuck at $7.25 per hour since 2009, is one reason why income growth is sluggish for low-wage earners, many economists argue. President Barack Obama raised the minimum wage for federal employees to $10.10 last year, but that is still far from what workers really deserve, according to the Center for Economic and Policy Research (CEPR).

If the minimum wage grew with labor productivity, CEPR points out that today's minimum wage would be around $21.72 an hour. 

Jackson — as shown in “Hard Earned,” which airs Sundays — is actively looking for a better paying job. He's interested in a train crew position where the hourly rate begins at $19. But Jackson, who is African-American, faces an uphill battle. The median household income for black Americans is just $34,598; that’s almost $24,000 a year less than the median household income for white families. 

"He has two strikes against him already: He's black, and he's male," Jackson's mom Chantel Jackson said. "He wants to work. He wants a better life for his kids, but it's going to be very hard for him. Welcome to life."

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