For Many, a New Job Means Lower Wages, Studies Find

Posted by Kendall Harmon

After being out of work for more than a year, Donna Ings, 47, finally landed a job in February as a home health aide, earning about $10 an hour, with a company in Lexington, Mass.

Chelsea Nelson, 21, started two weeks ago as a waitress at a truck stop in Mountainburg, Ark., making around $7 or $8 an hour, depending on tips, ending a lengthy job search that took her young family to California and back.

Both are ostensibly economic success stories, people who were able to find work in a difficult labor market. Ms. Ing’s employer, Home Instead Senior Care, a company with franchises across the country, has been aggressively expanding. Ms. Nelson’s restaurant, Silver Bridge Truck Stop, recently reopened and hired about 20 people last month in an area thirsty for jobs.

Both women, however, took large pay cuts from their old jobs — Ms. Ing worked in the office of a wholesale tuxedo distributor; Ms. Nelson used to be a secretary. And both remain worried about how they will make ends meet in the long run.

Read it all.

Filed under: * Economics, PoliticsEconomyCorporations/Corporate LifeLabor/Labor Unions/Labor MarketThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--

8 Comments
Posted August 31, 2010 at 12:44 pm [Printer Friendly] [Print w/ comments]



1. DavidBennett wrote:

Welcome to the new American economy, after many good jobs have been outsourced, and the free credit has ended. Unless something changes, I fear for the future of a middle class in America.

August 31, 2:57 pm | [comment link]
2. Dorpsgek wrote:

Where have all the good jobs gone?
Gone to India every one.

August 31, 5:45 pm | [comment link]
3. IchabodKunkleberry wrote:

#2,

  Not entirely. I work as an electrical engineer. Employers are bringing
Indians - cheaply hired - over to the U.S. on H1-B visas. It is a
wage-busting technique.

August 31, 9:27 pm | [comment link]
4. Bart Hall (Kansas, USA) wrote:

It’s called D-E-F-L-A-T-I-O-N, people. Wages, particularly those of government employees (who make 50% more than their private-sector analogues), must decline before we can move ahead.

In the meantime we have a different problem. My company has 0.4 FTE available between now and Christmas—basically one job not quite full time and another approaching half time, at a wage reasonably above minimum. Since last Wednesday I have had five responses to our adverts.

Every single one of them has wanted to work under the table for cash because (s)he is on extended unemployment benefits and wants to double-dip until the benefits hit their 99-week limit.

Thanks, you flaming idiots in Congress. Five years ago, when benefits expired after 26 weeks those same folks would have been happy for the work—unless (of course) they were still within their benefit period, in which case it would have been the same BS ... except 18 months sooner.

August 31, 11:29 pm | [comment link]
5. Capt. Father Warren wrote:

I would suggest that it is not necessarily wages which must decrease, rather the cost of a full time equivalent employee must decrease.  I work under an incentive compensation plan.  My WAGE BASE has been stagnant for four years.  Yet the cost to keep me on board has jumped; mainly taxes and healthcare benefits.  Both of those two factors are taking big jumps in 2011 thanks primarily to the Obama Administration.  Assuming the economy does not tank, our enterprise needs more people, but they will not be fulltime and quite likely they will be more retired folks interested in part time work and wages only.
I don’t forsee us creating a full time, career building opportunity next year unless a key person leaves.  This is a terrible way to run a company: we are not planning based on the opportunities we see in the market, we are hedging bets so as to limit the damage our government can do to us so we can survive!

September 1, 7:43 am | [comment link]
6. Dorpsgek wrote:

#3, give it time.  Once those guys learn your job, they’ll go back home and take your job with them.  I’m an engineer too and that’s what happened to me.  3 “global resource” guys could do half my job with half the quality at 80% of the cost.  My employer decided that was good enough.

September 1, 9:01 am | [comment link]
7. libraryjim wrote:

Happened to me. I took a $10,000 dollar cut just to have a job after almost a year of unemployment. And I’m working below my education grade of Librarian. But I have a job.

September 1, 9:54 pm | [comment link]
8. Clueless wrote:

The illegal immigrant boyfriend of my daughter, and one of his brothers (who arrived a month ago) have no trouble finding jobs.  They pay 10 bucks an hour, but are all under the table with no taxes or health benefits.  In the meantime, the legal sons of my friends are unable to find any job even at minimum wage.  The folks who employ illegal immigrants find it cheaper to pay higher cash for an illegal than to pay minimum wage plus taxes/workmans comp and SS for an illegal.  They are even less willing/able to do so now that Obamacare has been added to employer’s costs. 

Furthermore, the same folks who hire illegals are unwilling to give the same deal to a legal worker because the legal worker could easily turn the employer in to the IRS (getting a whistle blower money) while the illegal employee would not dare, for fear of being deported.

Naturally, when the legal guy gets hurt and goes to the hospital he gets a gigantic bill, while the illegal gets off free.  (BF went to the hospital not long ago). 

Thank you liberals for all the “benefits” you have given us.

September 2, 3:42 pm | [comment link]
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