In the last forty-five years, American economic productivity has gone through the roof while hourly wages have stagnated. Higher productivity means more wealth, of course, but workers aren’t seeing a proportional cut of that wealth — executives and shareholders are keeping it for themselves. The fact that the US labor force is almost 75 percent more productive than in 1973 but is paid practically the same per hour is central to the story of surging economic inequality.
But there’s another dimension to the story: workers’ hourly pay may have stalled out, but their average annual earnings have gone up. As elucidated in a new report from the Economic Policy Institute, there’s only one explanation for this: many people are working longer hours. In particular, those who earn the least and are most precariously employed have seen the most significant rise in work hours. The report finds that the 20 percent of wage earners in the lowest wage bracket have increased their annual work hours by nearly 24.3 percent since 1979. In the top quintile, that number only increased 3.6 percent.
There are a couple different ways to look at this, each of which is probably accurate for some groups and inaccurate for others. On the one hand, the statistic conjures images of working people suffering from metastasizing debts and expenses, compelled to work harder and harder just to keep up, especially as public benefits and services deteriorate and the collective social wage declines. On the other hand, we see evidence that some groups formerly boxed out of the labor force are making greater inroads. Women’s hours, for instance, have risen a lot more than men’s, and much of the difference is accounted for by weeks worked per year rather than weekly hours, indicating steadier employment.
Some workers may be compensating for the fact that they’re having a harder time making ends meet, whereas others may be finally getting opportunities for workforce participation previously denied to them. We can also imagine a combination of the two: for example, black women saw a huge spike in hours worked in the late 1990s, a time marked by unusually strong demand for labor — but also by the impact of the Clinton administration’s welfare reform law, which disproportionately harmed them. A tight labor market and somewhat fairer hiring practices meant there were greater opportunities for these black women — but at the same time, the deterioration of the social safety created a greater need to seek out those opportunities.
Careening out of Orbit
However varied workers’ individual circumstances, the aggregate result is that wage-earning Americans are working harder than at any time in recent memory, particularly at the bottom of the income ladder. Unfortunately, that’s only half of the story. The report also found that while people who do work are working harder, more and more people are careening out of orbit. The report’s authors explain:
As wage inequality has grown over the last four decades, we observe two very different responses when it comes to work hours. On one hand, workers are working many more hours a year, perhaps in part to compensate for tepid, and in some instances declining, hourly wage growth. On the other hand, a growing number of workers have become disconnected from the labor force, which we measure as not working at all over the course of an entire year.
The upshot is that some people are being pulled into the labor force, and working more hours while they’re at it, while others are being pushed out. Women comprise a larger percentage of the former, and men comprise a larger percentage of the latter. But an important trend complicates any explanation solely reliant on gender: women’s labor force participation actually plateaued in the late ‘90s, and the share of jobless women among those aged 25-54 has been growing at roughly the same rate as men since the beginning of the Great Recession. That is, women, too, are increasingly vulnerable to this overworked-underworked binary.
Whatever the specific reasons for the demographic distribution, the report makes one thing clear: we’re not just experiencing polarization between the top and the bottom of the economic spectrum. We’re also seeing a bifurcation at the bottom itself, with some people working longer hours than ever and others increasingly disconnected from the labor force entirely. Instead of having access to stable, manageable, well-paid jobs, the working class is staring down two unappealing options: in this economy you’re either burned out, or you’re boxed out.