America’s hidden economic crisis: Widespread wage cuts

[Afro]

America’s hidden economic crisis: Widespread wage cuts

The numbers haven’t received the same attention as job losses, which are highlighted every week in government data. But at least 4 million U.S. workers have received pay cuts since February even as they continued working the same job, and millions more have seen pay freezes, according to economists from the Federal Reserve and University of Chicago who put out a study analyzing data from the payroll processing company ADP.


Other estimates put it higher: Roughly 7 million workers have likely received a dock in pay, according to Mark Zandi, the chief economist at Moody’s Analytics. Combined with those who have been forced to log fewer hours, the number climbs to 20 million people — or 1 in 8 workers — who have seen their paychecks shrink over the past few months even as they continued to work, underscoring how much harm shutdowns have caused beyond layoffs alone.

“We have an income crisis that is even larger than a jobless crisis,” Claudia Sahm, director of macroeconomic policy at the Washington Center for Equitable Growth, wrote on Twitter recently.

“There’s so much that falls under that,” Sahm, who previously worked at the Federal Reserve, said in an interview, referring to the “income crisis” label. “There’s these massive job losses. There’s hours being cut, overtime being lost. And then on top of that — and this is something we just really haven’t seen at all — is a large fraction of workers taking cuts in their wages.”

Notably, the cuts are mostly hitting higher-wage workers, who tend to be more shielded from the effects of a downturn. And smaller paychecks, even in the short-term, lead to less spending, extending any recession.

 

[Nero Christ]

the wealthy ultimately want everyone who isn't them to be the working poor

 

[Afro]

the wealthy ultimately want everyone who isn't them to be the working poor

We'll know how badly this week

This the last week of extra benefits

 

[Nikki_04]

I experienced this temporarily (8 weeks). It was either a temporary pay cut or a bunch of people lose their jobs.

And we are still not out of the woods.

But I feel like white collar jobs or well paying jobs will be highly affected by this.

 

[Vandelay]

Neo-feudalism.