US FOCUS


McKinsey Global Institute, Making it in American


Many workers are not making it in America Infographic: Income


The middle class has slipped back to labor income levels of the 1990s


Evolution of real labor income (Index 1990=100)


100 110 120 130 140 150


90 1990 2000 2010


2015 distribution of US working population Millions of working people by annual wages1


98% of workers, or 158 million people, earn less than $200,000


Highest quintile RECESSION


Avg. wage $169,195


2% of workers, or 3 million


people, earn more than $200,000


$200K


Avg. wage $35,629


Middle quintiles


100 110 120 130 140 150


90 1990 2000 by total annual wages 14%


85% of workers, or 136 million people, earn less than $75,000


67% of workers, or 107 million people, earn less than $45,000


37% of workers, or 59 million people, earn less than $20,000


0 million 2 4 6 8


$20K $30K $40K $50K $60K $70K $80K $90K $100K


$10K $5K2


10 million workers 12 The US doesn’t just need growth. It needs more inclusive growth.


Reinvest in hard- hit communities


Reimagine work


Retrain workers


Remove barriers to mobility and participation


1 Wage statistics based on 2015 compensation data reported by the employer on W-2 forms. Occupational information from US Bureau of Labor Statistics Occupational Employment Survey.


2 All brackets, but especially those at the bottom, may include part-time workers and people who did not work the full year. 14 16 Select occupations in each wage bracket


• Lawyers • Software developers, managers • Engineers


2010


Some industries have felt more pain than others in terms of wage growth


Average real hourly wages by industry (Index 1990=100)


Finance RECESSION This combination of demands, explains Manufacturing Retail Construction Transportation


Cartus’s senior VP, Mark Sonders, is creating a new trend: a push for more flexibility in how employees move for work and in the kinds of support their employers provide. “The traditional pattern used to be


18%


• Registered nurses; accountants and auditors • Elementary school teachers; first-line supervisors • Electricians


30%


• Truck drivers • Office clerks • Retail salespersons • Home health aides; childcare workers


37%


• Cashiers; food prep workers; wait staff


18 20 million


that companies would move employees on sequential, multi-year moves from one place to another, with everyone expecting basically the same sort of support,” Mr Sonders says. “While those permanent moves are still prominent in companies’ approaches to relocation, an increasingly complex set of demands is driving companies to come up with more flexible approaches.” Short-term and temporary assignments


28 McKinsey Global Institute Part 1: Can America still manufacture?


trying to ensure they have the right people to the right places to meet organisational goals. Previously, employers had to balance demands for cost effectiveness with the need to recruit, retain, and develop talent. Now, they must also consider employees’ growing expectations of a positive experience, as this results in greater engagement and productivity.


have always been a part of the US relocation experience, says Mark Sonders. Their use now is a reflection of companies’ need to build more flexibility into how they handle employee relocation, while balancing demands for cost control, talent development, and the employee experience. Changing demographics – including the advent of Millennials and employees who are working well into their later years – and continuing cost-control pressures mean


that companies need new approaches and new technologies to deliver customised support for employees moving for their jobs.


Says Randy Wilson, CEO of NEI


Global Relocation, “Over the last two years, we have seen a growth of nearly 25 per cent in our global business, which includes an array of destination services to assist employees and their families in acclimating to their new area. “Five years ago, destination services were not offered as a standard benefit. When they were offered, it was typically as an abbreviated service for half a day, or maybe a full day. Now, they are typically a standard benefit, and services have expanded to provide assistance for two to three days.” The last word goes to National


Corporate Housing’s Tom Atchison. “The US is fortunate to have an abundance of resources, but none is more important than our people and the opportunity to achieve success. In the future, as in the past, we will experience talent shortages in certain industries and geographies as our society adjusts to the ever-changing world of technology and automation.”


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