SwimExpert
Gold Member
- Nov 26, 2013
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Okay, not really. But since you're reading, hear me out on a crazy idea about the effect of two income households on the American economy and how it could be said to be related to some of the economic problems we face today, particularly wage stagnation, income and wealth inequality, and unemployment.
DISCLAIMER: This is not actually about women. It's about the effect of two income households on our economy's development over time.
Wages
Let's go back for a moment to the days of our parents and grandparents. The days when single income households were much more common. Back in the golden age of the American economy. Back when most women didn't work and those who did typically made much less money than men. The wealth and income gaps were smaller back then. Blue collar folks worked hard and brought home the bacon. They might not have been rich, but they made enough to support the wife and kids at home. The market rate for jobs was decent. In fact, the market rate for most jobs paid a living wage. Not necessarily a living in luxury wage, but it was a living nonetheless. If mom did work, chances were that she didn't have a high level job. Her modest paycheck would not have supported the family. But it was icing on the cake. It helped add a few extra creature comforts to life.
As time went on, more and more women liked the idea of having their own money and not being completely dependent on their husbands. And even though some men felt like it was a slap in the face for their wives to be working, more and more men liked having the extra income, and with time it became more and more popular for women to seek jobs and bring in extra income. They were usually in lower level jobs, which meant less pay then their husbands. And even then, they were often paid a bit less than men who might have been working in those jobs. But they accepted the jobs at those wages because it was all just icing on the cake.
It was the birth of wage apathy in the American economy.
As more and more women were going to work, most households were feeling less and less pressure to strive for higher wages. It freed up the typical worker to worry less about (for example) a 10% pay difference between two different job offers. The family as a whole would still be quite comfortable with the dual channel income from both parents working, so slight differences in pay offers, or in raise offers, did not carry the same priority as they previously did. Thus was the beginning of wage atrophy. Workers began settling for slightly lower wages, whether it was a job offer or raise negotiations.
Employment/Unemployment
The strong economy supported many jobs. Small businesses were thriving, many were growing into large corporations but ultimately the small business man was the heartbeat of the economy. America was doing more and more new and great things. The more households joined the two income crowd, the more disposable income there was just waiting to be spent. And spend they did, fueling more and more jobs. Sure, the economy had its ups and downs. But it had found a good balance and a way to employ all these women who were entering the workforce not out of need, but out want.
For decades the American economic machine boomed and revved. Businesses found new ways to do the same things smarter, faster, leaner, cheaper. More and more money was there to be made, with less and less labor. Or sometimes just cheaper overseas labor altogether. But eventually, after decades of glory, things came to a wave head and went crashing down. In order to cope with a bad recession businesses did the best thing they could do. They looked for ways to cut costs and make production more efficient. They had no choice but to cut jobs in order to scale back production to the reduced levels of demand. Things started to improve slightly, but who could be sure? So businesses found ways to become more efficient so they could increase production without having to re-add as many new jobs. Eventually, business started booming once again, but there weren't as many jobs to go around anymore. Businesses didn't need to add as many jobs, because they found ways to increase productivity without them. It was much like the times long ago when most women stayed home and most families were single income households.
But there was a new problem. Because after all this time, the prevailing wages did not support a family like they once did. The blue collar workers of today are having a much more difficult time. Many don't make a "living" wage. Their wages, compared to their top bosses, are much smaller than all those decades ago. They're also much smaller today in terms of buying power.
So what happened?
What happened is that the wage market has atrophied because of wage apathy. Over the course of decades the pool of at large workers has settled for progressively lower wages. This is primarily attributable to reduced pressure to strive for higher wages when starting new jobs, and during routine performance evaluations. Which itself is attributable to the increased household income that resulted from the normalization of the two income household.
While 85% of employers expect a job candidate to negotiate for a salary, more than half of job seekers today do not even make an attempt. Similarly, the majority of individuals never attempt to negotiate job raises. This results in an employer friendly market for wages, which is being progressively depressed. As workers continue to simply accept whatever is initially offered to them, the median range will continue to gradually decrease. This will reduce leverage for when assertive workers do attempt to negotiate for improved wages.
We live in an economy that will not support the same levels of participation in the employment market as was previously the case. This is primarily caused by the transition from a predominantly small business economy to a predominantly large corporate economy. While this is partially being offset by large scale retirements in the baby boomer population workers cannot expect a return to worker friendly conditions anytime soon. This undermines their ability to leverage businesses' needs for labor to support worker friendly wages. Instead, businesses will offer lower wages because candidates have fewer opportunities for higher wages, especially those candidates who are not willing to attempt to negotiate.
So what happens now?
In order to gain access to improved wages workers should embrace negotiation. They should attempt to negotiate better wages from the start of their employment, beginning with the job offer. They should then endeavor to excel at their position in order to achieve high performance reviews. Once they have done so, they can use their high performance, as measured by their employer, to leverage raises above the current median level of the market range for the position they are in. Society as a whole needs to embrace individual accountability for negotiating favorable wages. Only through the efforts of assertive workers can the median wage for job positions be improved.
DISCLAIMER: This is not actually about women. It's about the effect of two income households on our economy's development over time.
Wages
Let's go back for a moment to the days of our parents and grandparents. The days when single income households were much more common. Back in the golden age of the American economy. Back when most women didn't work and those who did typically made much less money than men. The wealth and income gaps were smaller back then. Blue collar folks worked hard and brought home the bacon. They might not have been rich, but they made enough to support the wife and kids at home. The market rate for jobs was decent. In fact, the market rate for most jobs paid a living wage. Not necessarily a living in luxury wage, but it was a living nonetheless. If mom did work, chances were that she didn't have a high level job. Her modest paycheck would not have supported the family. But it was icing on the cake. It helped add a few extra creature comforts to life.
As time went on, more and more women liked the idea of having their own money and not being completely dependent on their husbands. And even though some men felt like it was a slap in the face for their wives to be working, more and more men liked having the extra income, and with time it became more and more popular for women to seek jobs and bring in extra income. They were usually in lower level jobs, which meant less pay then their husbands. And even then, they were often paid a bit less than men who might have been working in those jobs. But they accepted the jobs at those wages because it was all just icing on the cake.
It was the birth of wage apathy in the American economy.
As more and more women were going to work, most households were feeling less and less pressure to strive for higher wages. It freed up the typical worker to worry less about (for example) a 10% pay difference between two different job offers. The family as a whole would still be quite comfortable with the dual channel income from both parents working, so slight differences in pay offers, or in raise offers, did not carry the same priority as they previously did. Thus was the beginning of wage atrophy. Workers began settling for slightly lower wages, whether it was a job offer or raise negotiations.
Employment/Unemployment
The strong economy supported many jobs. Small businesses were thriving, many were growing into large corporations but ultimately the small business man was the heartbeat of the economy. America was doing more and more new and great things. The more households joined the two income crowd, the more disposable income there was just waiting to be spent. And spend they did, fueling more and more jobs. Sure, the economy had its ups and downs. But it had found a good balance and a way to employ all these women who were entering the workforce not out of need, but out want.
For decades the American economic machine boomed and revved. Businesses found new ways to do the same things smarter, faster, leaner, cheaper. More and more money was there to be made, with less and less labor. Or sometimes just cheaper overseas labor altogether. But eventually, after decades of glory, things came to a wave head and went crashing down. In order to cope with a bad recession businesses did the best thing they could do. They looked for ways to cut costs and make production more efficient. They had no choice but to cut jobs in order to scale back production to the reduced levels of demand. Things started to improve slightly, but who could be sure? So businesses found ways to become more efficient so they could increase production without having to re-add as many new jobs. Eventually, business started booming once again, but there weren't as many jobs to go around anymore. Businesses didn't need to add as many jobs, because they found ways to increase productivity without them. It was much like the times long ago when most women stayed home and most families were single income households.
But there was a new problem. Because after all this time, the prevailing wages did not support a family like they once did. The blue collar workers of today are having a much more difficult time. Many don't make a "living" wage. Their wages, compared to their top bosses, are much smaller than all those decades ago. They're also much smaller today in terms of buying power.
So what happened?
What happened is that the wage market has atrophied because of wage apathy. Over the course of decades the pool of at large workers has settled for progressively lower wages. This is primarily attributable to reduced pressure to strive for higher wages when starting new jobs, and during routine performance evaluations. Which itself is attributable to the increased household income that resulted from the normalization of the two income household.
While 85% of employers expect a job candidate to negotiate for a salary, more than half of job seekers today do not even make an attempt. Similarly, the majority of individuals never attempt to negotiate job raises. This results in an employer friendly market for wages, which is being progressively depressed. As workers continue to simply accept whatever is initially offered to them, the median range will continue to gradually decrease. This will reduce leverage for when assertive workers do attempt to negotiate for improved wages.
We live in an economy that will not support the same levels of participation in the employment market as was previously the case. This is primarily caused by the transition from a predominantly small business economy to a predominantly large corporate economy. While this is partially being offset by large scale retirements in the baby boomer population workers cannot expect a return to worker friendly conditions anytime soon. This undermines their ability to leverage businesses' needs for labor to support worker friendly wages. Instead, businesses will offer lower wages because candidates have fewer opportunities for higher wages, especially those candidates who are not willing to attempt to negotiate.
So what happens now?
In order to gain access to improved wages workers should embrace negotiation. They should attempt to negotiate better wages from the start of their employment, beginning with the job offer. They should then endeavor to excel at their position in order to achieve high performance reviews. Once they have done so, they can use their high performance, as measured by their employer, to leverage raises above the current median level of the market range for the position they are in. Society as a whole needs to embrace individual accountability for negotiating favorable wages. Only through the efforts of assertive workers can the median wage for job positions be improved.
