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Oregon paychecks lag nation, could shrink

October 15, 2009

By Oregon Tax News,

Oregon is near bottom in wage growth and it could get worse. According the United States Census Bureau, Oregon is currently ranked 8th in lowest pay check growth across the country.

The rise of unemployment in Oregon gives employers the opportunity to take advantage of the abundance of labor and lower wages.  Goldman Sachs’s chief United States economist, Jan Hatzius, predicts that average hourly earnings will fall about half a percent from the fourth quarter of 2009 through the fourth quarter of 2010.  Hatzius says his prediction accounts for workers’ strong aversion to wage cuts.  Without that adjustment, the projection would be negative two percent.

Analysts fear that the United States may face a downward debt-deflation spiral like that of the 1930s and Japan in the 1990s.  In such a trend, debt-burdened workers cut back on spending to make their interest payments, which drags the economy down even more.  “Imagine a person who got laid off six months ago,” says Paul Ashworth, senior United States economist for consultants Capital Economics.  “They’re going to get more and more desperate to get a job and more and more willing to take lower wages as time goes on.”

Oregon has some work to do if it intends to escape its declining wage growth.

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Discuss this article

Sybella October 15, 2009

I quit trying to raise my employees wages. The locked in minimum wage makes it really hard because that which should go to the better workers has instead to go to the poorer ones. This time I made a deal with two of my employees, that I wouldn’t replace the last do do that worked for us if they would pick up the slack and instead give the other persons wages to them. So far its working, at least until they want a day off to go play, then it all goes south and everyone drops back to the lower wage.

cc33 October 15, 2009

That minimum wage just drains on the wages of the other employees. Want to know why you have not recieved a raise? Talk to the new hires. Sybella you are rigth on.

dunno October 15, 2009

I would expect minimum wage to help lift our paychecks nationaly. This does not make full sense to me.

alwaysthere October 15, 2009

The economy is rebounding, the dow hit 10000, trade is up, watch paychecks begin to rise to make up for the slump. Things are getting better.

anonymous October 15, 2009

Could shrink? My pay has already done that.

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