BUFFALO’S BUSINESS
Workers feel the squeeze on their pay
The recession didn’t really hit Western New York until last fall, but most workers were feeling its effects in their paychecks long before then.
That’s because the average worker here was earning only 0.3 percent more last July, before the recession really hit hard here, than they were in July 2007, the U. S. Bureau of Labor Statistics reported last week. Average hourly earnings here are about 5 percent below the national average, bureau economists say.
That means the average full-time worker here was earning $19.93 per hour last July, a measly five cents an hour more than they were making a year earlier in July 2007.
And that was when times were good. Since then, a wide range of companies across the region have frozen wages or sought pay cuts from the workers who are lucky enough to still have their jobs.
Economists think the outlook for worker earnings will only get worse.
“The July 2009 numbers are going to be kind of scary,” says Jerry Newman, a University at Buffalo management professor and a compensation expert. “It’s going to be much more serious. There might even be a decline.”
Canisius College economist George Palumbo agrees. “It’s the first indication of what I think is coming for the next couple of years,” he says. “Workers are used to their wages keeping up with inflation. Now we’re looking at wages that are flat or declining.”
In one sense, earnings levels already are on the decline. The 0.3 percent increase didn’t even keep pace with the 0.7 percent rise in consumer prices during that time. That means that the purchasing power of those wages actually went down, leaving workers here with what amounts to a small pay cut when you factor in the higher cost of living.
The jobs that tended to buck the trend generally were occupations that required greater levels of training or were in an area where demand is growing. It also helped to be a public employee, especially if you’re a teacher or in the public safety field.
Here’s a look at some of the local trends:
• It’s good to be the boss. At a time when the average hourly wage locally wasn’t even keeping up with inflation, earnings for management workers rose by a very comfortable 5.1 percent.
• Teaching pays, too. Average hourly earnings for people in the education, training and library fields enjoyed a nice 5.3 percent boost in their mean hourly earnings, now averaging $34.24 an hour.
• Skilled health care workers are getting healthy raises, too. Average hourly earnings rose by 4.7 percent for health care practitioners, such as nurses, and other related technical occupations. That’s not surprising, given the rising demand for skilled nurses and other care providers as our population ages, yet registered nurses here still earn almost 15 percent less than the national average.
• Sales were good a year ago. That helps explain why sales-related jobs, including store clerks and cashiers, enjoyed a 3.5 percent increase in average hourly earnings at a time when the local economy still was holding up and the flow of Canadian shoppers was running strong.
• Making things doesn’t pay like it used to. Average earnings for production workers were down by 0.1 percent as local factory jobs disappeared at an alarming rate. Yet those workers still enjoyed earnings that are 11 percent higher than the industry average nationwide, reflecting the impact of the region’s good-paying auto jobs.
Construction workers absorbed a 0.9 percent drop in earnings. Transportation workers, such as truck drivers, took a 3.8 percent hit. Average earnings for workers who install, maintain and fix things fell by 3.9 percent.
• Workers who do good didn’t do well. Nobody took a bigger hit on their average earnings than the 10.1 percent drop absorbed by workers in the community and social work field.
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