Why Are Companies Paying Their Employees Less? The Answer is Surprising

September 12th 2014

Lindsay Haskell

After the recession six years ago, the United States has finally rebounded to its original job growth peak. However, a study by the National Employment Law Project reveals that lower wage industries – paying $9.48 to $13.33 an hour – constitute the majority (44%) of this recovery growth. The increasing amount of low-paying jobs can hit recent college graduates the hardest.

In only twelve years, the annual earnings for people ages 26 to 30 with a Bachelor's degree has decreased from an average of $45,800 to $41,700. Overall, the median pay of Millennials is $40,700 compared to the Baby Boomer generation's $56,400. This is in spite of the fact that the Millennials are the most highly educated generation to-date.

To learn more about millennials and wage stagnation, click here.

So why are companies paying their employees less? Simply put - because they can. Multiple class years who have graduated since 2007 are still competing with each other for a finite number of well-paying positions, and internships (frequently unpaid) have risen to supplant what would be full-time positions. Since more and more corporations have embraced outsourcing, college graduates have lost salary bargaining power, and we've also seen a vastly growing number of college graduates in minimum wage jobs which have doubled from 2007 to 2012.




While critics have often noted how long Millennials take to move out of their parents' homes, they often don't point out that the first step in making this happen would be to pay Millennials a livable wage.

Thankfully, help is on the way. Several states, including Florida and Washington, have already passed key minimum wage hikes, and many more are following their lead with minimum wage ballot measures in the upcoming midterm elections. In order to help continue this trend, support your Members of Congress and state legislators that endorse a minimum wage increase by registering to vote for them on November 4. You can also sign our petition to raise the wage here