As companies cut a higher-than-expected 131,000 jobs in July, you can't blame the American worker for seething. Wages remain stagnant and unemployment is at 9.5 percent, even as employee productivity is at levels not seen since 2002. Much of the workforce has endured pay cuts, furloughs, and a loss of benefits. During the same time frame, corporate profits have rebounded, according to the Standard & Poor's 500 Index. Main Street may not be adding jobs, but Wall Street went on a hiring binge, and according to a recent report by Obama's executive-compensation czar, banks paid $1.58 billion in bonuses at the end of 2008, just days after receiving federal bailout money and dangerously close to the nexus of the financial collapse.
The recession has irrevocably shifted the labor market. While top performers and those in hot industries such as tech or finance may still be able to negotiate generous compensation packages, ordinary workers may not see the cash. Employees may change jobs, only to find out that the same problems exist at new offices. Worse, workers will simply become accustomed to this new reality and feel a dampening of ambition: a sense of gratitude for any job. "It just becomes a way of life," says Robert Sutton, a professor of organizational behavior at the Stanford Graduate School of Business. For employees to really gain the upper hand again, they may need to wait until unemployment drops back to the 5 to 7 percent range. Unfortunately for everyone, that isn't expected any time soon."