Each year the Michigan League for Public Policy issues a Labor Day report on the status of Labor with in the state. This year the outcome for Michigan Labor is no better than in previous years. 90% of Michigan Labor finds themselves making less and a further deterioration in earning power. The upper 10% of Labor has been able to maintain its earning power while the majority of Labor today makes less than what it did 30 years ago when adjusting for inflation.
Median Wage workers making $15.89/hour in 2012 can purchase 7% less than Median Wage workers in 1982 while those workers in the 90th percentile has seen its purchasing power increase by 22% over the same period. Having the 4th highest Median Wage in 1982, Michigan saw its Median Wage deteriorate to 24th after losing much of its manufacturing base through globalization and the skewing of productivity gains to Capital. In comparison to other states and six of eight Midwest states, Michigan saw a decrease of 7% in Median Wage while the other states (Wisconsin decreased 2%) increased Median Wage. In determining the significance of the drop from from 1982 to 2012, Michigan ranked 50th amongst the states and District of Columbia with Alaska at 51st (larger drop).
90% of Michigan Labor’s earning power has been hit hard since 1982. Looking at the racial makeup of Michigan Labor and breaking it down by race, there is a great and growing disparity in earning power for African American when compared to Caucasian Labor. The gap in earning power between the two groups is at its widest in 34 years of tracking Labor wages. “The gap became widest in 2012, when the white median wage was $4.20 an hour (25%) higher than the African American median wage.1”
While overall Median Wage has decreased by 1% for Caucasian Labor, African Americans have seen a deterioration of Median Wages of 24% since 1982. During the Clinton era, it was said economic growth resulted in Labor seeing greater gains in wages. While this is true for Caucasians the gap between African American and Caucasian Labor. African American Labor did not experience the temporary growth in wages their Caucasian Labor counter parts did and remained flat.
A difference in Labor Wages can also be found at the professional levels as well. For example, a “$90,000 median wage for for whites and a $68,000 median wage exists for African Americans in selected majors such as Electrical Engineering.” While attaining a postsecondary credential can greatly increase earnings for African American workers, racial disparity will continue to exist.1” At the lower incomes the impact of education pays an even bigger factor in wages. The lack of a high school diploma is twice as high for African Americans as it is for Caucasians and the attainment of an Associates Degree is 40% higher for Caucasians as it is for African Americans.
Tom Hertz in Understanding Mobility in America pointed to various factors impacting the upward mobility of people in America. Like Peter Ruark, Tom Hertz pointed to education and income being important factors as well as location or residence. By law segregation was eliminated in the sixties; yet, metropolitan Detroit remains one of the most segregated areas in the country today. Peter Ruark suggests a linkage between occupational and the residential segregation experienced in Detroit; “residential patterns that segregate black and white youth increase the likelihood that these whites will find better-paying jobs in overwhelmingly white occupations and that blacks will end up in lower-paying occupations filled mostly by other blacks.3” To which I would add, the flight of business and whites has been occurring since the sixties destroying the tax base of the city leaving little resource for the city to address many of the issues there. While formal segregation has ended in the US, SCOTUS blocked the city and the NAACP from seeking resolution to the segregation of schools (Milliken vs Bradley).
Also in his conclusions, Hertz determines various factors limit the mobility of generations beyond that of income. The United States has one of the “lowest rates of intergenerational mobility among high-income nations, such that the chances of ending up rich if you were born to a low-income family are on the order of just one percent.2” Factors determining mobility include Education, Income, State in which you live, Health, female head of family, and Race of which Education is the most important factor. Even after controlling for the other factors in his study, Hertz determines Race plays a significant factor in upward mobility. Upward mobility for low and middle income Labor is difficult at best and even more so for African Americans when factors beyond income are considered.
1. “Labor Day Report, Michigan’s Payday Blues“ , Peter Ruark, Michigan League for Public Policy August 2013
2. “Understanding Mobility in America,” , Tom Hertz, The Center for Progress, April 2006
3. “Occupational and Residential Segregation: The Confluence of Two Systems of Inequality,”, Niki D. Von Lockette, Rutgers University School of Management and Labor Relations