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Have Your Wages Stopped Growing?

Wage increases have stalled for bottom and middle wage workers in Kansas City and in America while the economy is booming when measured by share prices and low unemployment.

35% of families in MO and 39% of families in KS don’t earn enough for basic needs according to the interactive map based on ALICE* calculations.

Part 2 of Dana Wilkie’s four part series for Society for Resource Management, “Why Have Some Wages Stopped Growing?” cites six theories for the wage stagnation.

  1. Minimum Wage and Unions – The inflation adjusted minimum wage has fallen below the 1968 value and union membership from 1983-2017 has decreased from 20.1% to 10.7% of the overall U.S. workforce.

  2. Productivity – Productivity is growing more slowly than in the 20th century, inflation is still low even though it was higher in June, 2018, than it has been since 2012, and companies want to drive up stock prices.

  3. Market shifts – Labor market is a “knowledge economy” and even wages for college graduates have plateaued.

  4. Automation and Outsourcing – Companies cut costs and increase profit margins and stock prices.

  5. Relocation – Fewer workers are willing to relocate for various reasons.

  6. Consolidation – Mega companies buy out competitors and can limit wage growth and turnover.

Next up is the review of Part 3, “Some Companies Boost Starting Salaries, But Getting a Raise Is Hard”.

*According to the United Way’s ALICE (Asset Limited, Income Constrained, Employed) Report, May, 2018

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