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Four reasons why wages remain low

While job growth is on the rise, wages are not, and in many cases are decreasing. Explaining this trend on, Gene Marks, who runs a consulting company, draws from his own experience and that of his client base. He cites the four following reasons for stagnant or decreasing wages:

Less demand by employers to hire additional people:

Employers continue to keep wages low as long as they're able to. Moreover, the number of employers using outsourced contractors is increasing significantly, while the number of freelancers also rises. 

Better technology makes people more productive:

Advancements in technology have lowered the number of employees that a company needs. Online knowledge resources, mobile devices, manufacturing machinery, workflows for invoices or reordering items and collaboration systems from Microsoft and Google are among a handful of these tools. 

Lack of commitment among employers:

With the economy still growing at a slow rate, some employers detect an overall anti-business climate and are choosing to "sit on their cash." At the same time, they're trying to avoid incurring debt and undertaking anything considered even somewhat risky. Additionally, healthcare, taxes and regulations are increasing their reluctance to add additional staff. 

Growing industries have low wages:

Finally, it is important to note that the industries that are growing, including restaurants, administrative, waste services and retail, typically have wages at the federal minimum. The New York Times reports that, over the past four years, 40 percent of the increase in the private sector was tied to minimum wage jobs. Moreover, people usually start businesses, such as services, contracting, small shops and restaurants, because they require relatively low capital. 

Therefore, while job growth continues, albeit at a gradual pace, wages remain stagnant or lower than they once were. Reports across the country, from Florida to Colorado, indicate that wages are barely or sometimes not even keeping up with inflation, demonstrating that the economy still has a ways to go.