More Proof Of A Poor Economy

The US economy is growing. Corporate profits are outrageous, and we are told unemployment is low. Why then, does a large majority of Americans disapprove of the way Georgie is handling the economy? It's easy to understand why the working-class is unhappy. There has not been a raise in the minimum wage in ages. While many of these salaries are above the minimum wage, all of them are based on and affected by the minimum wage.

But what about the college-educated workers? Aren't they doing great? In a word, NO. White House economists now admit that wage stagnation is hitting those with bachelor's degrees. After adjusting for inflation, earnings for workers with a four-year degree have fallen 5.2% between 2000 and 2004. About 30 million Americans have four-year degrees.

The Economic Policy Institute says degreed workers have not seen a prolonged slump in wages since the 1970's. In fact, between 1995 and 2000, wages for degreed workers rose 12%. When wages declined in the 1970's, it was because of the flood of baby-boomers entering the job market. Now the causes are different.

One major cause is outsourcing. Companies are shifting many white-collar and salaried jobs overseas to countries like India. Northeastern University economist, Paul Harrington, says this is what has happened to nearly half of the 6.5 million jobs created since 2001. Harrington also looked at the growth rate of salaried jobs. During the last five economic recoveries, there was an average increase of degreed jobs of 11.5%. The current job growth is 2.5%. Currently, about 15% of degreed workers are working "gray collar" jobs, beneath their skill and education level. Prior to 2001, it was 10%.

But the news gets worse. Some economists believe wage stagnation could be permanent for degreed workers. Richard Freeman, Harvard University economist, says degreed workers will continue to experience wage erosion because of the global labor market.

The corporations have to be loving this. Even the jobs they don't outsource have the threat of outsourcing and therefore the wages are kept artificially low. In Georgie's America, the rich are making more money than ever before, while the poor and middle-class make less. Many today are spending thousands to get a college degree, only to find that the job they were training for has been outsourced to another country.

Here are the current average salaries for the different education levels:

College graduates....................$51,206
High school graduates....................$27,915
No high school diploma....................$18,734