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Laboring Harder For Not Much More

Wages Fairly Stagnant In Five-Year Period

Lee, Mara

September 02, 2013

Operations managers, aerospace engineers, physical therapists and corrections officers have been getting raises that keep them ahead of inflation.

But for most jobs, and for most workers in Connecticut this Labor Day, pay has risen so slowly since the recession began in 2007 that they're just treading water. From May 2007 to May 2012, wages hardly kept up with inflation.

The median pay — the midpoint where half of all workers earn more, half less — for Connecticut's 1.6 million workers fell 0.3 percent in those five years, according to data from the U.S. Bureau of Labor Statistics. In 2012, the halfway mark in wages was $20.20 an hour — 7 cents less than in 2007, taking inflation into account.

Kathryn Kobe, a senior economist at Economic Consulting Services, said wage stagnation or deflation is common in times of high unemployment.

"What's going to trigger wage increases is businesses having to bid people away from jobs they're already in," said Kobe, who does quarterly projections of wage inflation for Bloomberg, a financial news service.

Even though many hires today are of people who already have jobs, both hiring managers and job candidates know the balance of power is with the employer.

"You're not demanding higher wages, because it's so scary out there," Kobe said.

When unemployment is low, workers have more leverage and can say: "I'm not going to take that job unless you pay me 10 percent more."

Collette Sykes sees these forces at play at the rehab facilities where she has worked, supervising dietary aides and helping the dietitian with meal planning. Before the recession, she'd get six to eight applicants for an opening. Now, even a job to cover just three hours on Sunday gets dozens of candidates. More than 50 applicants is normal. "People are just so desperate, they're applying for anything," she said.

The terrible economy is putting downward pressure on wages, she said. The company knows it can offer less than it used to, because people will take it. The median pay for this job category in Connecticut is now $10.11 an hour, 4 percent lower than it was five years ago.

Stagnant wages always accompany poor job markets, and economists do not project a dramatic turnaround in the near future. But when the job market returns to normal, how widely wage gains will be shared is in question.

Who's Falling Behind?

Generally, the higher-paid you are, the more likely pay in your job category is growing faster than inflation. Only the top 20 percent of earners in Connecticut — those paid more than $75,000 a year last year — gained ground, according to Census data analyzed by Connecticut Voices for Children.

In the detailed data by occupations, 49 percent of all jobs had wage gains faster than inflation during the five-year period. But for the jobs in the top 20 percent of wage distribution, more than 70 percent gained ground.

In some fields, the pay of the typical worker fell substantially. About 100 of 600 jobs tracked had pay drops of 11 percent or more, including biomedical engineers, retail sales clerks, CNC machine tool operators, office machine repairers, insurance sales and real estate agents, history professors, landscape architects, reporters, editors and TV camera operators.

If someone was paid $40,000 a year in 2007 and $40,000 in 2012, that individual's same salary would buy 10.5 percent less, because that's how much inflation rose over the five years.

The sharpest drop in pay in Connecticut was among TV and movie camera operators. Half of those employees made less than $12.20 an hour in 2012. Five years earlier, the pay was double that, the Labor Department data show.

In occupations where there were large drops, that doesn't mean that an individual's pay was cut, or that a specific machine operator lost his job and later found one at a factory that pays far less. Instead, big drops in pay within a job category are largely due to companies offering buyouts to older, more expensive employees — or laying them off — and either not replacing them or replacing them with younger, less expensive staff or contract workers.

"That happens in any recession," Kobe said.

Pay can also drop in an occupation when competition intensifies. That appears to be happening to private detectives, where the numbers have roughly doubled over the five-year period, reaching about 620 in 2012.

Dean Marino, a retiree from the state police in 2007, began working as a private detective late that year. Then, the typical private eye was paid more than $21 an hour, and by 2012, the midpoint in the salary range was down to $17.56 an hour.

Marino has his own business in West Hartford, but for a few months in 2007, he worked as a p.i. as an employee, and was paid $19 an hour.

"You have a wealth of knowledge and experience, but you're not being compensated fairly," he said.

He ended up working full time as a security manager from 2008 to 2010 because he couldn't drum up enough business working for himself. He still doesn't have as much work as he'd like, or enough to match his former state salary, which was more than $70,000 in his final year.

He said a lot of people, when they find out what it's going to cost to find a missing person, say: "It's just too expensive, I can't afford it."

"I do get people that are shopping around," he said. "There is a lot of competition. I'm going to give you a product that's professional and ethical and left no stone unturned. If you have a toothache, you go to the dentist, you don't go to the plumber."

Women who go for facials are also making similar calculations: wanting the service, but wondering how much they should budget for it.

Skin specialists were second worst in the measure of which occupations lost the most ground. The data say that in 2012, half of the state's skin specialists make less than $9.28 an hour. This covers people who do facials, laser hair removal and the like.

Terri Carboni, an esthetician and owner of Skin Care Studio in Niantic, said that she worked at Norwalk Inn's spa for 24 years and that she doesn't believe any of the women who give facials there are paid that little.

But she said she does see the economy's effect on her job. Tips are lower. Women who used to be regular clients got laid off from Pfizer and moved away. Women who used to come in every six weeks for a facial wait eight or 12 weeks before coming again.

In response, she introduced a "petite retreat" facial, at $65 rather than $95, and she said demand seems to be picking up. She is also discounting products so that she doesn't lose sales to online vendors.

When she worked for the Norwalk Inn, she worked 35 hours a week, and her goal is to have 20 hours a week of facials at her own studio. She's pleased that she phased out of working for the Inn two years ago to concentrate on her spa, which has been open 11 years.

"Working on people, seeing the way their skin is looking, it's just very rewarding," she said.

The rewards to the psyche are also why Jonathan Stankiewicz, 24, hasn't regretted becoming a newspaper reporter. The median pay of reporters — for newspapers but also for TV stations, magazines and online outlets — fell 26 percent during the five years when inflation is taken into account.

"Informing the public is a feeling that is very hard to describe," he said. "It's empowering."

Half the reporters in Connecticut earn less than $32,220 a year, or about $15 an hour. Five years earlier, the typical reporter earned $39,510.

Stankiewicz, who works for the Chronicle in Willimantic, said he's in the bottom half of pay for reporters, but he thinks his paycheck is fine.

"Obviously you work your way up in this business; it's not about making less than 30,000 [dollars] in your life."

Stankiewicz lives with his parents in Vernon so he can pay $600 a month in student loans. But he hopes to move in with a roommate by next spring.

He is concerned that with the shrinking business, there may not be a job for him at a bigger paper that would pay more. The woman he replaced went back to school, he said. He said that 90 percent of the reporters he knew at the Journal Inquirer when he was an intern are no longer in journalism.

What's Next For Wages?

When the economy is healthier, people get raises that advance their standard of living. From 2000 to 2007, pay outpaced inflation by 3.3 percent.

Kobe, from Economic Consulting Services, said raises this year are likely to be around 2 percent, at the inflation rate.

"The situation's not going to change enough for workers to demand more wages," she said.

Kobe said the growth in contract workers — even for skilled jobs, such as accountants and IT — raises questions. In recent decades, decent economic growth advanced the standard of living of skilled workers, and rapid economic growth, as in the late '90s, raised wages for everyone. Will that still be true in the future? What will greater use of contractors mean for productivity? We just don't know, she said.

But in a few fields, there's a shortage of qualified workers, and so wages are rising briskly. One such field in Connecticut is people who do painting in auto body shops or factories that make airplane parts.

The median wage for those painters is $22 an hour, up from $14 five years ago.

Day Palmer, vice president of Gowans-Knight, a small factory in Watertown, is advertising for a painter at a pay range of $18 to $22 an hour, and said she might have to pay more than $22. In the first two weeks, she didn't get a single qualified applicant, but eventually, she had seven applications, two from qualified applicants, and she'll interview them.

"The harder it is to find somebody to do the work, the more you have to pay somebody to entice them to do the work," she said.

She said the factory, which builds and overhauls fire trucks, has too few workers to have time to train a student right out of a technical high school, who would be available at lower wages.

"In our business, quality is the most important thing," she said. "We don't let anything out that's not 100 percent OK."