Wages rose briskly last year for a small percentage of highly
skilled workers, including nurses and airline pilots. But they failed to keep
pace with inflation for musicians, elementary-school teachers and most other
workers.
These are among the findings of the Department of Labor's 2004
National Compensation Survey, which was released this month and reports hourly
wages across more than 450 occupations covering 81 million workers.
Overall, average hourly wages for American workers were $18.09
in July 2004, when the government conducted the survey. That was up 1.9% from
$17.75 in July 2003. During that period, though, inflation, as measured by the
consumer-price index, advanced 3%, wiping out the wage gains.
When viewed over a longer time period, 1997 to 2004, wages beat
inflation, rising 19.9%, compared with a gain of 17.7% for the CPI. But Jim
Glassman, an economist at J.P. Morgan Chase & Co., says that wage gains outpaced
inflation in the late 1990s because the economy was strong and energy prices
were subdued. Now that inflation has picked up and employers are holding the
line on wages, "workers are getting squeezed," he says. "We are seeing wages go
down as benefit costs go up, and an energy shock like this is catching everyone
off guard."
Nonetheless, there were some surprises. Despite the turmoil in
the airline industry, the average hourly pay for pilots was $113.82 last year,
up 15.6% from 2003 and the highest for any job category measured. Economics
professors, in response to the popularity of the subject and the relative
scarcity of professors available to teach it, came in second, with average
hourly pay of $63.98, up 1.9% from 2003. In third place were medical doctors,
with average hourly pay of $57.90 last year, up 9.4% from 2003.
But workers in all three of these occupations earned similar
wages on a weekly basis, according to the government data. While hourly pay for
pilots was substantially higher than the pay for any other occupation in the
government's survey, pilots worked an average of just 20.5 hours a week because
of federal restrictions on flying time. Meanwhile, doctors worked more than 40
hours a week on average, as did economics professors (most of whom work
year-round). And while pilots' pay will remain high, their future gains will be
meager because their contracts are essentially flat for the next five years,
says the Air Line Pilots Association.
At the bottom of the list are waiters and waitresses (earning
$4.44 per hour), bartenders ($6.71) and recreation-park attendants ($7.23).
Hamburger flippers and other cooks -- the stereotypical dead-end, low-paid
American job -- had hourly pay of $9.56 last year, up 30 cents from the year
before. All of these workers, though, failed to keep pace with inflation from
1997 to 2004.
The National Compensation Survey is considered the government's
most comprehensive look at wages, but it does have drawbacks. It doesn't
accurately reflect trends for professionals whose pay is tied to company
performance and stock options, which eliminates some of the nation's highest
paid executives and professionals on Wall Street. While it does include
commissions earned by salesmen, it excludes professionals who work for
themselves, including some doctors and lawyers.
But for the millions of Americans who work for a paycheck and
perform typical American jobs -- from doctors in hospitals to secretaries to
teachers to truck drivers -- the survey provides a sweeping look at salary
trends. It indicates, for example, that average hourly wages for government
workers last year ($22.77) continued to outpace wages for private-sector workers
($17.25), and that the gap between the two is growing. Workers on the West Coast
have the highest average wages ($20.70), while those in the U.S. Census division
that includes Alabama, Kentucky, Mississippi and Tennessee have the lowest wages
($14.49).
Technology continues to be a driving force behind wage
disparities. Where technology has allowed workers to become more productive or
requires that they boost their skills, workers are getting paid more. In
industries where technology has made workers redundant, wages failed to keep
pace. "Machines substitute for less skilled workers but they create new demand
for higher skilled workers," says Harry Holzer, an economist at Georgetown
University.
The Wall Street Journal asked Economy.com, an economic
consulting firm in West Chester, Pa., to compare the results of the 2004
National Compensation Survey with the 1997 survey and to compute changes in
wages, adjusting for inflation. That allowed us to see which occupations were
keeping up with inflation over that seven-year period and which ones were not.
Here are some winners and losers:
WINNERS
Despite all the talk of white-collar outsourcing, computer
programmers saw their average hourly wage climb an inflation-adjusted 21%, to
$28.98, from 1997 to 2004. Jeff Lyons, a programmer in Prairieville, La.,
attributes the rise to the increasingly complex software needs of the government
and large corporations. The industry "is more specialized and you need more
certifications," he says.
The shortage of nurses, coupled with the aging and ailing
population, pushed nurses' wages up 14% during the period, to an average hourly
rate of $26.87. "The money now is getting where it should be to attract the best
people," says Ann Converso, a 53-year-old nurse at the Veterans Administration
hospital in Buffalo, N.Y.
Dental hygienists is another category of health-care worker who
have registered strong hourly wage gains, despite the fact that their average
annual pay has trailed inflation since they are working fewer hours. Their
average hourly wage was up an inflation-adjusted 30% for the seven-year period
that ended in 2004, and now stands at $30.86. The climb has narrowed the salary
gap between hygienists and dentists, whose average hourly salary fell an
inflation-adjusted 3% during the period despite the fact that from 2003 to 2004,
dentists' wages were up 7% after inflation to $42.91.
Dentists are paying hygienists more to prevent them from going
out on their own. "I am expecting to make three to four times the money I made
working for a dentist," says Deborah Durbin, a 45-year-old hygienist who
recently opened her own practice in Redding, Calif. At the same time, more
Americans are taking care of their teeth. "Ten years ago, nobody mentioned
gingivitis," says Katie Dawson, president of the American Dental Hygienists'
Association.
Even some wages in manufacturing, the sector hit hardest by the
2001 recession, have outpaced inflation. From 1997 to 2004, assemblers, a
category that includes a large number of auto workers, saw wages climb an
inflation-adjusted 8% to $14.17. Paul Krell, director of public relations for
the United Auto Workers in Detroit, says that new part-making technology and
improvements in factory organization have made workers more efficient and
boosted their pay. Machinists have also seen their hourly wages increase an
inflation-adjusted 7% to $19.59 from 1997 to 2004.
The housing boom has carved out several other categories of
winners. In past years, wages for real-estate agents had been falling as waves
of new workers entered the business. But that's been changing; last year the
average hourly pay for real-estate agents, including commissions, jumped 30%
after inflation to $30.69. But wages are still lower than they were during
previous housing booms. In 1997, the average hourly wage for a real-estate agent
was $33.95.
Electricians' wages were up 17% after inflation to $25.15 from
1997 to 2004. The spike was driven not only by increased construction, but also
by post-9/11 demand for security and surveillance systems, according to Rob
Colgan, executive director of marketing for the National Electrical Contractors
Association in Bethesda, Md.
Skilled construction workers, such as stone and brick masons,
have also benefited from booming business. In 2004, masons' average hourly wage
of $27.50 was up 51% from 1997 after discounting for inflation. Andrew deGruchy,
a 44-year-old mason in Quakertown, Pa., says wages are rising in response to
demand. Customers are growing more concerned with preserving the value of their
homes, he says, and are upgrading them with expensive masonry as opposed to
vinyl siding or other manufactured veneers.
LOSERS
Rising home construction hasn't helped all workers equally.
Workers in less skilled construction work, which has attracted a large number of
immigrants, have seen their after-inflation adjusted wages decline. Doug Taylor,
a former plasterer for Wyatt Inc. in Pittsburgh, who is now the business manager
for his local Plasters and Cement Masons Union, says workers are struggling to
compete with immigrants from Russia and Poland who are willing to work for half
the price. As a result, the average wage earned by a plasterer was $14.84 in
2004, down 17% from 1997.
Truck drivers have posted some increases over the past few
years in response to a nationwide shortage. But the gains are coming after years
of dramatic losses when new route-mapping technologies and the rebound of
railroad shipping led to an excess supply of workers, says Thomas Nightingale,
vice president of corporate marketing for Schneider National. As a result, from
1997 to 2004, the average hourly wage for truckers fell an inflation-adjusted 9%
to $14.85.
Of all professions whose wages have failed to keep up with
inflation, musicians and composers have taken some of the hardest hits. (Since
1997, however, their annual pay has beat inflation because they are working more
hours.) In 2004, their average hourly wage was $33.89, down 30% from 1997 and 5%
from 2003 after discounting for inflation. Jan Gippo, 59, a flutist for the St.
Louis Symphony Orchestra, says orchestra musicians have been squeezed by
cash-strapped donors. The orchestra's current base annual salary of about
$74,000 is shy of the more than $80,000 musicians would be receiving if their
contract in 2000 had been honored, he says. Furthermore, many musicians in
traveling productions of Broadway shows have been replaced by computers.
While wages have raced ahead of inflation in some professions
and trailed behind it in others, pay for many other workers is hovering at
inflation's edge. Natural scientists, social workers and elementary school
teachers have seen very modest wage growth since 1997, with their
inflation-adjusted wages up 2%, 2%, and 5%, respectively, since 1997. Within the
past year, however, elementary school teachers and social workers both failed to
keep up with inflation.
"There is not funding to make our salaries equitable to other
professions," says Maribeth Sellers, a third-grade teacher in Noblesville, Ind.
"In general, for the amount of time we put in, we are underpaid."
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