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Business and Labor

Average Weekly Earnings Fall in May, Below 2007 When Adjusted for Inflation

Earnings, BUF-NF, NY(WNY) Data from the US Bureau of Labor Statistics show that average weekly earnings of private-sector employees in the Buffalo-Niagara Falls, NY metro area fell by more than eight dollars to $702.47 over the year in May.1 When adjusted for inflation, average weekly private-sector earnings in May 2013 are below May 2007 by over 5%. Real (inflation-adjusted) private-sector average weekly earnings in May this year are lower than in any May since 2009. Analysis suggests that should currently prevailing economic conditions continue to the end of the year, most gains to real average private-sector earnings since the depths of the recession in 2009 will be erased (see chart).

Possible contributing factors to low, stagnating private-sector earnings include: (1), employment growth in low-wage industries like temporary agencies, leisure & hospitality, and retail; (2), a growing number of part-time jobs staffed by workers who really want to work full time; and (3), weak bargaining power of labor vis à vis business.

1 This sentence is updated to show an over-the-year change rather than an over-the-month change, because the source data are not seasonally adjusted.

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