U.S. Workers Better Off Than They Think, Trade Group Says

Seeking to rebut complaints that workers’ well-being is eroding as companies downsize and boost profits, the nation’s biggest manufacturing trade group released a study Thursday that maintains workers are better off than they think.

Conventional wisdom says that today’s workers are suffering from wage stagnation and job losses, but the National Assn. of Manufacturers says its study found there has actually been significant growth in employment and real wages since the late 1970s.

Factoring in employee benefits and taxes, total compensation paid to labor accounts for a greater percentage of net national income than it did in the supposedly idyllic world of the 1950s, according to the study’s authors.

“Much of what is said about the plight of workers is inflammatory, demagogic or flat-out wrong,” said Jerry Jasinowski, president of the trade group and a coauthor of the study. “Not all workers in all sectors of the economy are doing well, of course, but much of the anxiety workers feel is based on political hyperbole that is picked up by the media. In reality, we live in a time of immense economic opportunity for employees at all levels.”

Nonetheless, Jasinowski added, companies do need to spend more money on educating and training their workers to compete in today’s rapidly changing economic environment.

The study, whose title is “Improving the Economic Condition of the American Worker,” is part of an effort by the business community to counteract a growing dissatisfaction with corporate America. The association is an influential lobbying group that counts many of the nation’s biggest companies among its 12,500 members. Its study comes on the heels of widely publicized efforts by the Clinton administration and others to push companies to provide better wages and more job security.

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Earlier this week, Sen. Edward M. Kennedy (D-Mass.) proposed tax breaks for companies that provide better wages, benefits and training. Labor Secretary Robert B. Reich recently launched a campaign to publicly congratulate “good corporate citizens” in an effort to stem a rising tide of layoffs that have turned today’s workers into the “anxious class.”

The NAM study relies largely on published government statistics to support its findings. However, it notes that different government statistics can be interpreted in different ways--that some point to opportunity and job creation while others “suggest gloom and victimization.”

The study, acknowledging that there is plenty of anxiety--and good grounds for it--says the blame rests with slow economic growth and high income tax rates, which erode Americans’ spending power, not with wages.

The study calls for government reform and tax reductions, and it also encourages companies to increase education and training. Companies should forge a new contract with their workers that emphasizes sharing information, provides performance-based compensation and moves toward more effective dispute-resolution techniques.

While the manufacturers’ group acknowledges that a rise in layoffs has contributed to a justifiable worker nervousness, it adds that the economy has created far more jobs than have been lost.

In addition, the group says that although some government statistics indicate that wages have stagnated, those figures do not account for growth in employee benefit plans. Workers today receive as much as one-third of their total compensation in the form of untaxed benefits, and those have grown faster than wages in recent years, it says. Accounting for benefits, inflation-adjusted wages have risen by 14.4% since 1979, according to the study.

Moreover, the nation’s primary inflation indicator--the consumer price index--is widely believed to overstate the true rate of inflation. If the CPI were adjusted to reflect real inflation, the study says, workers would see that their total compensation has risen 23% since 1979.

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A Labor Department analyst said that the average wage statistics cited by the association obscure an important point: There’s a widening gap between the earnings of the highest-paid and the lowest-paid workers.

“If you look at wages by quartiles, you’ll find the very top quartile is making much more but there’s real erosion at the bottom and the middle,” the analyst said.

Other experts agreed.

“We keep seeing what’s talked about as the erosion of the middle class,” said John Challenger, executive vice president at Challenger, Gray & Christmas, an international outplacement firm headquartered in Northbrook, Ill. “Middle managers at the upper end of the middle class are losing their jobs in unprecedented numbers. Meanwhile, blue-collar workers at the lower end are losing jobs, wages and benefits through weakening of labor unions.”