Since the Great Recession, America’s pay increases have stacked up poorly compared to other developed countries.
Eight years after Lehman Brothers’ bankruptcy filing signaled the start of the financial crisis, the U.S. has posted the worst salary recovery among developed Group of 20, or G-20 countries, according to executive search firm Korn Ferry’s Hay Group unit.
U.S. salaries have fallen 3.1% after adjusting for inflation since Lehman’s bankruptcy on Sept. 15, 2008, the study says. That’s the worst among the G-20 group, which also includes the United Kingdom, Canada, France, Germany, Italy, Japan and Korea.
Canada notched the best pay recovery among the nations, with inflation-adjusted salaries rising 7.2% since 2008. Pay rose 5.9% in Australia, 5.2% in France, 5% in Germany and 2.4% in Italy. Salaries fell 0.1% in the UK.
America’s poor performance can partly be traced to its preponderance of jobs in low-wage sectors such as retail, restaurants and hotels, and healthcare, says Benjamin Frost, a Korn Ferry product manager. But even within entry-level jobs – a category that includes clerks, call center representatives,, carpenters and production line supervisors — the U.S. fares worst, with salaries falling 14.8%.
The bigger raises overseas are attributed to the pervasive influence of labor unions and collective bargaining agreements that help support wage growth broadly in countries such as Italy, Germany, France and Australia. Unions have been on the decline in the U.S. for decades.
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