Contrary to the belief that Americans are paid well, the standard of American workers has fallen tremendously in the last decade. About 67.1 per cent of wage earners in 2012 earned an average wage less than or equal to $42,498.21. According to the Social Security Administration, 50 per cent of wage earners make less than or equal to $27,519.10 annually. The reasons for the decline in the standard of living of American workers are:
- Corporations are moving their production overseas and limited investment in factories has led to the elimination of good jobs. Good paying jobs are now being replaced by low paying part-time jobs In 2013, 77 per cent part-time jobs were created as against 953,000 full-time jobs. This can be quite depressing as wages of low paying jobs are declining while the cost of living is increasing every day.
- The jobs are being outsourced – whether it is a call center job to India or factory work to China – which has brought a lot of profit to corporate America while restricting the wages back at home. Reduction in domestic manufacturing has led to the decline in the living standards for US workers.
- New and better technology have increased productivity and machines have replaced workers. Advancement in technology has lead to a decrease in low skilled workers. The jobs lost to machines will not come back.
- Due to a steady decline in the economy, the demand for jobs is increasing day by day. Inflation has led to the decline in quality jobs. The bills keep increasing but not their paychecks. This has led many families to survive on monthly paychecks. About 76 per cent Americans are living on their monthly paychecks, as per a survey by Bankrate.com in 2013.
- The economic changes have given rise to inequality. There is a rising gap between the rich and poor. Gains are concentrated among the top leaders while those in middle and lower income group have led to a decline in their standard of living. The pay of top executives is 100 times higher than typical workers. Also, weakened bargaining position among workers makes companies threaten their workers saying they will relocate their factory overseas if workers do not take pay cuts.
Better economy will lead to an improved standard of living among American workers.