Long Crisis Brings Lower Wages

There seems to be no end in sight for declining economic activity in the United States. With jobs hard to come by, even poor lower paying jobs, the Long Crises brings lower wages which will intensify the crisis.

“Wages are going to take a hit,” said Chad Sowash, vice president of the Direct Employers Association, a nonprofit organization that represents the interests of senior recruiters.

Sowash met Friday with Fortune 500 employers in the healthcare, IT and defense sectors, who told him anyone looking for a job now should expect to earn 10 percent to 20 percent less than they were paid on their previous job, depending on the position and the industry.

“The days of springboarding a career into another $10,000 a year, this is just not the situation for that,” Sowash said.

As reported in Reuters, “There’s no end in sight,” said Tig Gilliam, chief executive of Adecco Group North America, the third-largest U.S. employer behind Wal-Mart Stores and the postal service.

“March is going to be the same, and I don’t see anything that will make April better.”

The Long Crisis is going to be very hard to stabilize, much less reverse. Those who expect a quick recovery are likely to be acutely disappointed. As jobs become more difficult to find even most of those with good fortune who find new employment will be earning less wages.

The combination of unemployed and of those who are employed receiving less pay takes even more spending power out of the economy. A feedback loop is established whereby fewer workers are employed, and there is less pay for those who do find work. This sad condition leads to less income in the economy and that means less spending. Less spending means that employers will have to further cut production. Less production means less workers are needed and around and around we go in the downward Long Crisis spiral.

I feel that those who expect a quick fix and early end to this disaster are still in a state of denial. Everyone should know by now that those who got us into this mess, and their cheerleaders, the talking heads, are not going to be able to get us out. The sooner one takes responsibility for their own well being and survival the better off they will be. The Long Crisis will not be taking prisoners.