The Sept. 3 news article “Fewer factory workers, more work in health care,” which documented changes in the “nature of work in Rhode Island,” hits some important points and notes that the shifts we’ve seen in the Ocean State largely reflect national trends.
Two points bear further clarification, however. The first is that the loss of manufacturing jobs is most significant because many of them were union jobs, and most paid family-supporting wages. Second, the article closes with data on increasing average wages. A closer look shows wages have been stagnant, which is an important difference.
Using median wages rather than average wages is a more accurate way to gauge earnings for middle income earners, since median wage data are not distorted by the sharp growth in compensation going to the top wage earners, which has been driving growth in income inequality in Rhode Island.
More importantly, presenting nominal rather than inflation-adjusted data paints an inaccurate picture. Looking at inflation-adjusted median wages, we see that workers have seen essentially stagnant wage growth. The inflation-adjusted (to 2016 dollars) median annual wage for Rhode Island workers in 2001 was $37,523, compared with $37,086 in 2007, and $37,336 in 2016. These inflation-adjusted numbers conform with the experience of working families in Rhode Island, who have spent too many years working hard, but unable to get ahead.
We need to pursue policies that result in broadly shared wage growth.
The writer is director of economic and fiscal policy at the Economic Progress Institute, formerly the Poverty Institute.