How to Deal with Wage Stagnation

"how to deal with wage stagnation"

Wage stagnation is a huge problem facing American society today. Basic necessities such as housing, childcare, and healthcare continue to grow at an exceptional rate, while wage growth remains stagnant. How are people supposed to get by in this type of economy? How are we supposed to deal with wage stagnation?

This is a battle with two fronts. Not only do we have to deal with wage stagnation as individuals trying to get by, but we have to deal with it as a societal problem as well. Helping ourselves get by in this difficult economy is great, but it won’t help the economy as a whole. But at the same time, fixing systematic economic problems takes ages, and we have to help ourselves first. That’s just life.

How to Deal with Wage Stagnation at the Individual Level

I think most people care about dealing with wage stagnation at the personal level more than at the societal level. I get that, low wages affect you every day- it affects your family, your children, and how you live your life. Of course, you have to figure out a way to resolve that before you can even think about resolving things for everyone else.

The best advice I can offer to individuals is the same tried and true advice that you will see on most financial websites. Try to keep your expenses as low as possible, don’t spend more than you earn, and try to make extra money. Side hustles are a great way to increase your income – many people take a side gig such as driving for Uber, selling things online, and pet sitting in order to make up for their lack of wages. Yeah, I agree that it sucks to have to get basically a second job just to keep up with the increased cost of living, but that’s the world we live in right now.

Another option is to increase your salary through finding a better job. Lots of people say you should go back to school to increase your skill set, but let’s be realistic. With the outrageous and ever-increasing costs of education, that just isn’t plausible for most people. It’s more realistic to take a few certification courses that are in line with your current career. These still cost money, but sometimes you have to invest in yourself to move forward.

The final thing that you can do to deal with wage stagnation at a personal level is decrease your spending. That’s very difficult when the costs of the basics continue to rise, but there are some non-essentials that you might be able to cut out. You can downgrade your phone plan, cut cable, eat out less, and live like a pauper. You can even try to eat on as little as twenty dollars a month! I know, it’s not that appealing. But you have to make ends meet somehow. You gotta do what you gotta do to get by when wages won’t keep up with inflation.

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How to Deal with Wage Stagnation at the Societal Level

Not everyone can increase their income, and millions of people have nothing left to cut. That’s why it’s so important to deal with issues such as wage stagnation at the societal level as well. I know that the culture of the United States is all about rugged individualism, and we pride ourselves on being able to pull ourselves up. But at some point, we have to admit that the current system just isn’t working for everyone (or even most people) and we have to make an effort to fix that.

There are some candidates running for president with new and interesting ideas of how to fix these issues. The ideas of a federal $15 per hour minimum wage, affordable college tuition, and universal healthcare have all been front and center in the latest debates. My favorite idea, and one the one that I think would do the most to solve this problem of stagnant wages, is the idea of the freedom dividend. I’ve written about universal basic income before and why I think it’s a good idea, so I won’t go into that again here. But I will stress (yet again) how incredibly important it is to vote.

Vote for Policies that Will Fix These Issues

I don’t care which politician you vote for (I mean I do, but I’m not going to tell you who to vote for!). But I do care about the policies that you vote for – and you should too. Why do we continue to vote people into office who want to give hand outs to the already wealthy mega-corporations? Why do we consider tax breaks for corporations capitalism, and tax breaks for individuals socialism? I’m not even trying to call out one political party over another. There are politicians on both sides of the aisle who promote corporatism over the welfare of American citizens.

And I get it – if you have tons of money of course you are going to vote for and support policies that protect your wealth and help you generate even more. But, most Americans don’t have tons of money. We have to stop pretending that we are temporarily embarrassed millionaires, and stop this insidious belief that if we are poor, it’s because we are bad people (or deserve it for some reason). It’s time to actually look at the policies that have been in place for decades which have led to one of the largest wealth disparities in history – and let’s be honest it’s not because the poor don’t’ work hard enough. Its because policies have been put in place that favor the rich. It’s time to vote for policies that favor everyone.

Voting for a certain candidate or party for president won’t fix these issues overnight. Whoever wins the presidency will need the support of congress to enact their signature platform policy. That’s why it’s so important to vote in every election, all the time.

Vote with Your Dollars

Another huge thing you can do to help deal with wage stagnation at the societal level is to vote with your dollars. Stop giving money to the huge corporations which are partly responsible for stagnant wages. Walmart and McDonalds can afford to pay their employees more, but they don’t want to cut into corporate profits.

Shop at local small businesses instead of Walmart. Go to the Farmer’s market rather than the grocery store. Eat at the local mom and pop restaurant instead of the giant chain. Millennials are leading the way with this one, foregoing (killing) Applebee’s and Chilis and going to trendy local joints instead. I say good for them! We should all be doing those things!

If you’re going to shop online, use an independent blogger or artist’s Affiliate link for your purchases to help support them. Amazon is a huge corporation, but if you use your favorite bloggers link (like mine!), you can at least know that you are supporting a little guy with your purchase as well. You can also buy from artisans on Etsy, or resellers on Ebay. Yes, a corporation will still get a cut, but you can feel good knowing you are supporting a little guy as well. 

If we, as a whole, stop giving money to these huge corporations that refuse to pay their employees decent wages, they will be forced to either go out of business or adapt. And it’s definitely doable! Costco pays their employees decent wages, and they’ve managed to stay afloat. In and Out Burger also pays great wages, especially for the fast food industry. These companies are proof that it can be done, but that some of the larger companies just don’t want to do it.

Be The Change you Want to See

It’s not all about voting though. Changing the way ordinary Americans think about wages and wealth is a cultural issue as well. I touched on this before, when I wrote about how we tend to value people based on what they do for a living over who they are as people. Our society values wealth, and as a result has some weird hero-worship thing going on for the wealthy. We assume that rich people worked hard, are good people, and deserve everything they have, while the poor haven’t tried hard enough. And it’s time to change that mindset.

Stop judging people based on what they do for a living, and start judging them based on who they are as people. Let’s put value to unpaid (or low paid) work, such as childcare, elder care, and volunteer work. That means respecting the people who do this work and supporting their fights for better wages, benefits, or working conditions. We can affect change if we work together and speak up together. 

A Complicated Issue

I know that wage stagnation is a complicated issue, and it’s not possible for me to solve with a blog post (wouldn’t that be great though?)! But it’s important to discuss these complicated issues, and work together to find solutions.

So what do you think? What do you think we can do as individuals to help deal with wage stagnation as a society? I’d love to hear your opinions!

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Author: melanie

4 thoughts on “How to Deal with Wage Stagnation

  1. Thank you for posting this.I am so appreciative when I see financial bloggers use their platform to address societal economic issues as well as personal ones.

    1. You’re welcome! I try to mix it up. I think it’s incredibly important to address these issues, and if I can help using my (very small haha) platform, I will.

  2. I like how you include a variety of options because there is no one size fits all for this issue. It will depend a lot on your life stage and how flexible you can be in responding. I am a career coach and recruiter so have seen thousands of careers play out in my 20+ years of doing this. Some people are locked into big expenses — a high cost city, kids about to go to college, family obligations to extended family or elder parents. Some people are very invested in a specific career (b/c of high academic costs or years spent in the field) and thinking about doing something else is very painful. I have seen people succeed by trimming expenses like you pointed out, getting side hustles going, switching careers altogether, or sometimes staying put but negotiating for more. There are many paths to success, even when wages seem stuck. One of the things I love about FIRE is that pursuing it means you’re less dependent on any specific wage source.

    1. Thank you! It’s such a complicated issue, I would be remiss if I didn’t try to include as many options as possible. And I know I still missed some things. That’s one of the reasons I’m pursuing FIRE too, I don’t want to be dependent on a paycheck. You never know when that will dry up.

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