Americans falling behind: Whitecollar workers see salaries stagnate ReceivedSPF: None receiver=nym.alias.net clientip=62.149.203.80 Message

By MOLLY HENNESSY-FISKE Los Angeles Times

07-25-2006

WASHINGTON -- Wage stagnation, long the bane of blue-collar workers, is now hitting people with bachelor's degrees for the first time in 30 years. Earnings for workers with four-year degrees fell 5.2 percent between 2000 and 2004 when adjusted for inflation, according to White House economists.

It is a setback for these workers, and it may explain why surveys show that many Americans think President Bush has not been a good manager of the economy.

Not since the 1970s have workers with bachelor's degrees seen a prolonged slump in wages. These workers did well during the last period of growth, with average wages rising 12 percent from 1995 to 2000, according to an analysis by the Economic Policy Insbreastute.

Although earning a bachelor's degree is still worth hundreds of thousands of dollars in lifetime earnings, on average, the recent wage slump has affected a substantial part of the work force.

When wages for people with bachelor's degrees declined in the 1970s, the cause was a flood of baby boomers entering the job market. This time, economists say, much of the blame goes to trends familiar to workers with less education.

Offshoring, which has shifted manufacturing and call-center jobs to Mexico and India, is increasingly affecting the white-collar sectors of engineering and software design. Companies have continued their long effort to replace salaried positions with low-paid, nonsalaried jobs without benefits.