50% of All US Workers Made Less Than $26,000 in 2010

The basic message contained in these data is that middle class jobs are disappearing, creating a large pool of educated and uneducated workers, who through their increasing numbers lose further negotiating leverage for wages.

The pincers of evaporating jobs and declining wages is what is fueling the continuing economic malaise. The jobs available - in food service and, to a lesser degree, construction - are relatively unskilled so combine to keep overall wages low. New entrants to the job market face similar problems because openings are rare and competition for them is fierce, which further depresses compensation.

In the meantime, the economy is still largely dependent on consumers, but as these data demonstrate, their capacity to consume is being constrained. The growth in low-wage jobs portends slowing consumption until investment is reinvigorated. Meanwhile, compensation at the highest end of the scale remains robust, as are the markets for luxury goods makers who service them. This is not a recipe for expansion or for political quiescence. JL

Derek Thompson reports in The Atlantic:

Today we get our first look at American wages in 2010 based on payroll taxes reported to the Social Security Administration. David Cay Johnston picks out the most important takeaways, including:

Half of all workers made less than $26,364, the median wage in 2010. That's the lowest level since 1999, after adjusting for inflationThe number of millionaires increased by about 20 percent.

The size of the missing workforce is 10 million. The number of working people fell by 5.2 million since 2007. But that's not the entire job deficit, because, based on population growth estimates, 4.5 million more would have joined the workforce between 2007 and 2011. Add it up, and you get a 10-million-worker gap.

What you see is that median pay took a nosedive after 2007, effectively wiping out all gains made in the previous eight years. The macro explanation is that the economy shrunk, and middle class jobs disappeared and were replaced with (or outlasted by) lower-paying positions that companies kept on. But the economy isn't one giant corporation. It's thousands of giant, medium-sized, and small companies in industries that lived through very different recessions.

The industries with wages growing considerably slower than the rest of the country -- the ones really pulling down the national average -- are construction (huge bubble burst), food service (a an unproductive industry that requires little advanced education) and sales and retail (another unproductive industry that requires little advanced education). So one thing that's keeping wages low is the fact that the most important stimulus of the last decade blew up in our face, and another big thing is that lots of workers without college degrees don't have the skills to demand higher wages in more productive professions. I'm as astounding as Johnston about these wage numbers, but I'm less optimistic that is the kind of trend we can reverse in an election.