The COVID-19 pandemic has drawn attention to the importance of several groups of workers. Prior to March 2020, delivery drivers were seldom referred to as heroes. And, while people probably always had respect for nurses and hospital workers, they weren’t showering them with applause. This increase in respect for these workers is terrific. Know what hasn’t been terrific? The lack of growth in these workers’ wages over the past 25 years. God, I’m a downer.
In this post, I want to make three basic points. First, since the early 1990s, workers being rightfully lauded right now have seen little income growth. Second, the lack of growth for these workers has occurred at a time when economic growth has actually occurred. In other words, more income exists in the economy, it just hasn’t gone to these folks. Third, despite their importance, these workers are not immune to some of the economic damage being wrought by COVID-19.
The Lagging Income Growth of Nurses, Health Aides, and Delivery Drivers
Several groups have gotten attention for their work during this crisis. But, front-line hospital workers and delivery drivers have been thrust to the forefront. Front-line hospital workers because they face this virus each day, helping others while exposing themselves to danger. And, delivery drivers because they continue to work, which helps others not expose themselves to the virus.
To look at how these workers are doing, I created an index that when higher than 100 suggests wage growth. I did this exercise for two different training-levels of nurses. For registered nurses, who have graduated from a nursing program and passed a national licensing exam. And for health aids, orderlies, and nursing assistants, who have less training than registered nurses but perform many important tasks. I also looked at delivery and truck drivers.
For comparison sake, I also included GDP per capita, i.e., the amount of income available per person in the entire economy. Finally, I included the median CEO’s total compensation (I start in 1992 since this year was the first for which I had CEO income). In the figure below, red lines are our heroes, the grey line is GDP per capita, and the black line is the median CEO’s total compensation. Yeah, those red lines are that flat. Maybe, I shouldn’t have been surprised — in an earlier blog post I showed how little growth there has been for the typical worker.
Figure. Median Income of Select Workers and GDP Per Capita, Relative to 1992
Registered Nurses, Nursing Aides and Orderlies, and Truck/Delivery Drivers have seen no income growth at the median. It’s not like the income isn’t there. GDP per capita has risen 50 percent. CEO salary has more than doubled. Yet today, the median Registered Nurse make a little over $65,000, Nursing Aide $28,000, and Truck/Delivery Driver $45,000. About the same as 1992. The median CEO made $2,069,000 in 2016, more than double what it was in 1992.
At Least these Workers Are Economically Protected from COVID…Right?
OK, so that’s not great news. Our typical COVID hero hasn’t seen any income growth, even though the amount of money in the economy has grown. But, we would hope that these workers have kept their jobs at least. But here’s the thing, a lot of health workers do heroic work in fields that have nothing to do with COVID. And, those fields are suffering. The problem is that people are holding off on important preventative measures, for example cancer screening. And, not every truck or delivery driver works delivering Amazon packages and groceries.
The figure below shows that the workers we are talking about look pretty typical with respect to job loss. Like my last post, the figure shows the share of people working in April 2019 who had lost their jobs or were laid off in April 2020. So, the workers we are showering praise on are not immune to this downturn. Many who do great work but not specifically on the front lines of the COVID crisis have been hurt. So, we shouldn’t fall into the trap of thinking these worker’s are all immune to this downturn.
Figure 2. Share of People Unemployed or Laid/Off One Year After Working, April 2020
The workers called to the forefront of the COVID-19 crisis are putting a lot on the line. But, over several decades, their wages haven’t grown at all. Calling people heroes is nice…paying people like heroes is probably better. I can’t speak for them, but in a New York Times Op-Ed some Amazon employees have pointed out they didn’t sign up to be heroes. And, it doesn’t help that they are about to lose their Hazard Pay.
Indeed, we have to be careful about how we think of these workers. Calling them heroes and giving them respect is important. But, if we begin to think that because they’re heroes, they are willing to sacrifice pay, we may end up giving them short shrift. Instead, we may better serve them by thinking about why so little of the economic growth of the last twenty-five years has gone their way.