It is economically corrosive and utterly unfair that median household income continues to slide six years after the end of the recession. New census data show that three of every four residents in the Philadelphia region, whether in a suburb or the city, have seen their incomes decline. The drop was 5 percent in New Jersey and 3 percent in Pennsylvania.
Wages are down even though productivity is way up, but wages haven't been linked to productivity since the 1970s. Between 1979 and 2013, productivity grew almost 65 percent, while wages for 80 percent of the workforce grew only 8 percent, according to the Economic Policy Institute.
That means people are working harder but not getting paid commensurately. In fact, most of the benefits of increased productivity flowed to the very highest earners, who saw their annual salaries increase 154 percent.
Lower-paid workers were helped when almost three-quarters of the states (but not Pennsylvania) raised their minimum wages, and President Obama broadened eligibility for overtime and cracked down on wage theft. But that didn't affect enough workers.
Wages should be linked to productivity. Companies giving top executives bonuses should sprinkle some wealth on the workers who drove up the bottom line. That's not only fair; it might kick up morale, which in turn could increase productivity.
Other local governments and the states should follow Philadelphia's lead and require not only government vendors, but also their subcontractors, to pay a living wage. The federal government has a similar requirement, which should help some families as projects under the new transportation bill start up.
Of course, tax policies and global economic forces also play a role in what wage earners bring home. Tax policies that treat investment income and wages differently should be changed. And stronger steps should be taken to address currency manipulation by foreign countries, which costs American workers jobs and makes this country's trade deficit worse. Unfortunately, sanctions for currency manipulation aren't included in the Trans-Pacific Partnership treaty, which will be voted on by the Senate next year.
In the midst of another holiday season, retailers could use a boost in consumer confidence to entice people to shop. But workers who know their paychecks aren't stretching as far as they would like are less likely to break out a plastic card or dig into a bank account to make a purchase.