10 ms·

Researchers answer a question about the decline of the middle class

54 points by mortenjorck 9y ago

nnfy 9y ago
I don't mean to be sexist, but I've wondered purely out of curiosity if the decline in wages is related at all to the entry of women into the work force. You've nearly doubled the number of wage seekers without necessarily increasing the supply of jobs. I also wonder if two income earners are likely to earn more money than a single income earner for a given labor demand, considering overhead of employment, which I think has also increased over time (e.g. benefits). That couple explain some of wage stagnation, I'd bet.
- eric_b 9y ago
  I don't think you're being sexist. I think that's a very good question. If we roughly double the supply of labor, but have roughly the same number of jobs - what would happen? Wages would naturally go down. It's obviously not that simple, but there's good reason to believe that the entry of more women in to the labor force put downward pressure on wages. What will be interesting is if the more recent trend of young men leaving the labor force will put upward pressure on wages, or if the jobs will just disappear.
  - abakker 9y ago
    One interesting observation that supports this is that women's labor rate participation had a slower ramp. Not a doubling over night. Following that, their wage equality has slowly been ramping, too. Both of those sound like gradual dilutive trends on the labor supply/wage graph. I REALLY like the idea of looking the cumulative burden of employer-born costs of employees as the percentage of dual earners goes up. my "bet" is that you'd find that the cost of those benefits have been growing at par with the women's labor force participation rate. Take a look at the charts in the Slate Star Codex post on Cost Disease, and overlay the growth in Women's labor force participation rate, and growing pay equality. The relationship is likely not perfectly causal, but there might be a meaningful effect in there.
  - runT1ME 9y ago
    Why would we have the same number of jobs? If more women are working who didn't before, they will need some way to commute to said job, to buy work clothes as well as leisure clothes, have more disposable income, etc.
    - eric_b 9y ago
      Yep, that's why I said "it's obviously not that simple". I also described "downward pressure" on wages, not a cutting of wages in half.
- sonnyz 9y ago
  The number of jobs in the U.S. has been increasing pretty steadily. You can look for the years in question here: https://data.bls.gov/timeseries/CES0000000001 https://data.bls.gov/timeseries/CES0000000001
  - nnfy 9y ago
    That alone isn't enough data to answer the question. I arbitrarily picked 1962 as a starting point, and while the number of employees since then has approximately tripled, the population of US citizens has approximately doubled, in addition to the gradual entry of women into the work force. Additionally, the page you linked shows number of employees, and does not account for the possibility of multiple jobs effectively replacing the work of one person because of job market saturation, and an associated depression of wages.
- twobyfour 9y ago
  It's not sexist to suggest increasing labor supply due to women's entry into the workforce might factor into decreased prices. (Though women were always in the workforce to a greater extent than many 1950s nostalgics want to admit, just in lower prestige and lower wage jobs). What would be sexist would be to suggest that the solution is to exclude women from the labor force in the future.
  - watwut 9y ago
    The nostalgic like to treat idealized middle class as standard - ignoring everyone else and ignoring most problems society had.
- clairity 9y ago
  no, that is quite unlikely to have much explanatory power here. you're applying static thinking to a dynamic system. women have been integrating into the work force for the past 100 years. it wasn't an instantaneous doubling all of the sudden. consumption grew in lock-step with labor supply over those many years, so labor demand rose as well to meet the new consumer demand. a so-called virtuous cycle. wage stagnation is tied to the growing wealth of the top 1%, not working women.
- hackuser 9y ago
  > I've wondered purely out of curiosity if the decline in wages is related at all to the entry of women into the work force Adding workers adds wealth per capita; it's not a zero-sum situation. Adding more workers to the economy grows the economy, by more than the salaries of those workers (if they cost more than they produced, they wouldn't be hired). Now all these women are producing value, they increase productivity, and they also can afford to buy things from you. Consider it this way: Where would you rather open your store, a town where only the men work, or where both the men and the women work?
folli 9y ago
Summary: On average, workers born in 1942 earned as much or more over their careers than workers born in any year since The trend has also widened the gap between the rich and everyone else as, overall, the economy has continued to grow overall but the bulk of those gains have ended up in the pockets of the affluent. While economists have been concerned about recent data on earnings, the new paper suggests that ordinary Americans have been dealing with serious economic problems for much longer than may be widely recognized. The new research shows that in the past, a good guide to forecasting typical career earnings among Americans of a given age has been their average income they were 25. Young workers’ incomes are still declining today, suggesting that their trajectories over the rest of their careers will be lower as well.
- TimPC 9y ago
  I suspect that the at 25 income prediction will be less and less accurate as a predictor given high value PhD's. In the past the rarity of those programs might have covered up the problem with using those estimates for that group, but as it grows it probably creates substantial challenges for such a metric. Similarly, with start-ups becoming more popular, income at Age 25 might value options at 0 and lead to an underreported value for anyone in a successful exit. Willingness to take risk with low income when young, might also lead to situations where founders are reporting 0 income at 25, but are likely to have successful careers regardless of whether they exit.
  - HeyLaughingBoy 9y ago
    Still, relative to the population at large, the number of PhD's and startup founders isn't even a droplet in the bucket...
  - Jare 9y ago
    High value PhDs should not be a significant portion of the statistic for the entire country.
  - Thrymr 9y ago
    Statistically, those high value PhDs and successful exits are way off on the high end of the tail of the distribution for all 25-year-olds. I suspect they are not going to budge the median values at all.
DiffEq 9y ago
The middle class is decreasing mainly because of divorce and thus the creation of single parent homes; additionally middle class families leave the middle class because BOTH parents work and thus moving them into the upper class - when if one of them worked they would stay in middle class.
- nnfy 9y ago
  I don't think that's true. While the term is of course loosely defined, unless you are at the top of the middle class, you can't leave the middle class by simply doubling income.
- thesagan 9y ago
  Sounds more like a symptom than a cause, and even that's guessing at best.
- pdelbarba 9y ago
  This doesn't make any sense. Just because divorce rates have gone up somewhat since the 40s doesn't mean that it's structural. People get remarried. Also, if one person makes 60k and then moves in with another person making 60k, they don't magically become upper class at 120k, because they still have most of the expenses of two people minus some savings in housing (which most people wave by buying huge houses) Edit: and 120k/yr is nowhere near "upper-class"
  - clairity 9y ago
    actually, if you define upper class as the top quintile in household income (a common objective definition, as opposed to the also common colloquial "how you feel" definition), then anything above $112K in household income is upper class: http://www.taxpolicycenter.org/statistics/household-income-quintiles http://www.taxpolicycenter.org/statistics/household-income-q...
    - sp332 9y ago
      In a CNBC Millionaire Survey it can be observed that a majority of millionaires polled, representing the wealthiest 10 percent of Americans, described themselves as middle class (44%) or upper middle class (40%)... Estimates for the size of this group [upper class] commonly vary from 1% to 2%, while some surveys have indicated that as many as 6% of Americans identify as "upper class." https://en.wikipedia.org/wiki/American_upper_class https://en.wikipedia.org/wiki/American_upper_class
eric_b 9y ago
I take most of these articles with a grain of salt. The Washington Post has not (lately, at least) been a source of hard hitting analysis. Additionally, this study has not been peer reviewed, but they certainly treat it as though it has. Looking at the charts and the analysis - one concern raised is that workers starting out in 2010 had lower real wages than their counterparts from 1969. A really simple explanation might be that in 2010 we were still in the deepest part of the biggest recession in recent history. What do you think that would do to starting wages? I know there is a narrative they are trying to tell, but in the past 12-24 months they are so obviously biased I simply don't believe anything they write anymore. Edit: I might add that I worry very much about the decline of the middle class. The problem is I don't trust any news source to tell me objective truths, and the more I dig for this information the more the black and white rhetoric doesn't seem to fit.
- edc117 9y ago
  Thank you, I'm glad to see another comment like this. I've also started avoiding WP for similar reasons; it feels as though they've been trying to become Fox News for the left, which is not what I'm looking for in journalism. More and more it feels like discussion is being dominated by irrational actors, and news orgs pander to this for eyeballs.
- hn_throwaway_99 9y ago
  You are cherry picking on the 2010 issue. The graphs show lines for the beginning of every decade since 1980. The year 2000 was basically the peak of the .com bubble, and it still showed 25 year olds making less than 25 year olds in 1980. I get your point about selecting data from any individual year, but the trend lines shown in the graphs cover entire periods.
neves 9y ago
When the syndicates stopped to get some respect from workers? It looks like correlated to the lowering of wages.
TimJYoung 9y ago
The peak for the average worker seems to revolve around 1965-1970, based upon various stats that I've read. This jives with my personal experience also. My father, who was employed in manufacturing as a foreman (and later, cost accountant, after earning his degree), was on his way up until the late 1970s. It was right around that time that manufacturing operations in the midwest and northeast started their first moves toward lower labor costs by relocating plants to the south and southeast (later, even this would not be enough and they would move to Mexico, China, etc.). The main purpose seemed to be union-busting. It practically killed our family, financially. My parents used up all of their savings (quite a bit, I might add) while my father tried, in vain to find employment. They had to sell their custom-built dream home (think modest 70s home, not modern McMansion monstrosity), and we were, technically, homeless for half a year while we lived with my aunt/uncle. My father eventually found employment as a cost accountant, but we had to uproot our lives and move to Florida. And, more importantly, my father's real earnings never recovered and he never got back to the level he had previously earned. There's a lot of evidence to show that all of this was intentional and orchestrated: http://www.laborrising.com/2013/07/union-organizing-and-the-business-roundtable-and-american-labor/ http://www.laborrising.com/2013/07/union-organizing-and-the-... Note, this was written in 1979, after about 10 years of the effects of the efforts of organizations like the Business Roundtable. BTW, I can't help but add: the small hometown where I grew up in the midwest now has a pretty bad Oxy/Heroin/Meth problem on its hands.
- prostoalex 9y ago
  > The peak for the average worker seems to revolve around 1965-1970 The era also coincides with massive amounts of women entering the workforce.
  - TimJYoung 9y ago
    Yes, but they weren't closing and re-locating entire manufacturing plants because women were entering the workforce.
tboyd47 9y ago
I wonder when it is going to become clear that America's economic growth has peaked. I recently read that Warren Buffet made the point in 2006 that in order for America to continue growing as it has for the last century, the Dow would have to surpass 2,000,000 by 2099, and during the years 2000-2006, it didn't grow at all from its place at roughly 11,000 (but now it appears to be growing again). Sidestepping the question of whether or not it has peaked, and when that peak was/is, it seems to be in everyone's best interest to at least pretend that it has not, and perhaps, will never.
- hackuser 9y ago
  > America's economic growth has peaked I assume you mean, the size of the economy has peaked. The rate of growth was never thought to be increasing (i.e., it didn't grow 4% one year, 4.1% the next, etc.). This question is answered by well-known data, GDP growth. That popular number represents, effectively, the increase in the economy's size every year. The U.S. economy has grown and continues to grow every year since 1950, with the only exception being 2008, the worst year of the Great Recession. http://www.multpl.com/us-gdp-growth-rate/table/by-year http://www.multpl.com/us-gdp-growth-rate/table/by-year
  - 101km 9y ago
    I believe parent is saying "Peak GDP".
    - hackuser 9y ago
      What does that mean? If it means, literally, U.S. Gross Domestic Product has reached its peak, then my point that the GDP has grown every year but one since 1950 answers the question. To be clear: Every year since 1950, except one, the U.S. GDP has been larger than the year before.
      - 101km 9y ago
        It is similar to "Peak Oil". Things are finite, nothing grows forever.
golemotron 9y ago
Technology is the elephant in the room, isn't it? It's possible to make money with fewer and fewer employees, and it takes less money to meet our basic needs and entertain ourselves. The result is declining birth rate and income. It is going to continue in this direction and we don't know what to do about it.
- FullMtlAlcoholc 9y ago
  Has the percentage of income spent on food and housing gone down?
rdlecler1 9y ago
The article also doesn't take into account education and housing debt. Not only do you make less, more of what little you make goes toward things that would have been paid off after a few years. Add to that the expectation that the younger generation is footing the Medicare and social security bill for baby boomers and you have a case of generational servitude.
- cowardlydragon 9y ago
  Um, you forgot the healthcare cost explosion. And the fact that we will never see a dime of Social Security.
tomjen3 9y ago
I have seen a ton of these kinds of articles posted here over the years, but none of them touches on what PG wrote in one of his essays: the reason salaries were so high after the war and until the 70is were that the US was the only country that had a modern, intact industrial base and so it was worth it for the companies to overpay for labor, in the same way that it is worth it for a start-up to overpay for e.g servers. Later, after the boom, they started to cut their overspending.
- 6stringmerc 9y ago
  So where did the "excess" from the "overspending" go in your model? Surely it didn't bring up the standard of living worldwide, because we'd have noticed it by now. No, your term "overspending" is far too loaded for me to believe in. I am far more inclined to believe the Investor Class has been doing their damndest to widen the wealth gap at every opportunity since WWII, and wouldn't you know it, all the numbers add up. It's much more like there was a healthy dynamic between management, investors, and the working class, and it's all been shot to shit in the name of quarterly profiteering and Ayn Rand "bootstrap" delusions.
  - mistermann 9y ago
    The Ayn Rand I know would throw all of our modern "capitalists" in prison for their theft, deceit, and immoral desire for the unearned. Best not to get your opinions second or third hand from the deliberately dishonest.
  - cvwright 9y ago
    > Surely it didn't bring up the standard of living worldwide, because we'd have noticed it by now. But the worldwide standard of living has massively increased over the past 50 years.
  - tomjen3 9y ago
    After World War II, about the time the US was about to begin its boom, people in Holland had to go out near the coal trains so that they could pick up whatever coal had fallen off the trains, or they would have nothing to heat their homes with; Germany was flattened as was Japan and Korea. Meat rationing in the UK did not end until July 4, 1954 – that's almost a decade after the war. Japan did not start getting back on its feet until the Korean War. I have been to Germany and I can personally assure you that the life they live now is nothing like it was in 1950. So yeah, there's your rising standard of living worldwide. Key point _worldwide_, although some of it also happened to US.
nimos 9y ago
I think it is actually a lot worse than household incomes suggest. Having a parent stay home is tremendously valuable to a household in providing childcare, food preparation and all sorts of other valuable labour. None of this gets measured in incomes/GDP but as soon as you have both parents working and paying for childcare, paying for prepared meals and so on it does get measured in household income and GDP. So when we just look at household income we're actually underestimating the decline because there also used to be more unmeasured value provided by stay at home parents.
tailrecursion 9y ago
When I see a statement such as, Income in men declined 10-19% over several decades, I think: OK. Why? Is the ratio of young/old different from before? Were those living on social security included in those stats? What does that have to do with wages? Is it because men are choosing different jobs? Is it because they are working fewer hours? Is it because they are choosing to earn less, because cable TV and internet connection are enough? Is it because cars cost less? Is it because, generally over the population, men are choosing activities other than work? Is it because feminists have changed women who have changed men into deciding not to marry women, generally over the population, which reduces the drive or opportunity to pursue larger incomes? Is the pay hidden somehow, more now than before, going to medical costs instead of salary? The conclusions in the news article depend heavily on definitions for "middle class" and "workers" and seem to assume that wealth equals money and that income equals wages.
- Spooky23 9y ago
  Consider that women and African Americans were exclusively fenced off on the fringes of the workforce. Between increased domestic supply of workers, increased supply of foreign workers, globalization and demographic drag as we need to pay the pensions of the baby boomers with smaller cohorts of workers. Combine that with anti-labor policies and its a no brainer why earnings are dropping.
prewett 9y ago
I thought the question was going to be "why?" but instead the question they purported to answer was "when did it start?" Kind of a click-baity headline by the WP; I wish they had a "did not meet expectations" button :(

54 points by mortenjorck 9y ago

nnfy 9y ago

I don't mean to be sexist, but I've wondered purely out of curiosity if the decline in wages is related at all to the entry of women into the work force. You've nearly doubled the number of wage seekers without necessarily increasing the supply of jobs. I also wonder if two income earners are likely to earn more money than a single income earner for a given labor demand, considering overhead of employment, which I think has also increased over time (e.g. benefits). That couple explain some of wage stagnation, I'd bet.

eric_b 9y ago
I don't think you're being sexist. I think that's a very good question. If we roughly double the supply of labor, but have roughly the same number of jobs - what would happen? Wages would naturally go down. It's obviously not that simple, but there's good reason to believe that the entry of more women in to the labor force put downward pressure on wages. What will be interesting is if the more recent trend of young men leaving the labor force will put upward pressure on wages, or if the jobs will just disappear.
- abakker 9y ago
  One interesting observation that supports this is that women's labor rate participation had a slower ramp. Not a doubling over night. Following that, their wage equality has slowly been ramping, too. Both of those sound like gradual dilutive trends on the labor supply/wage graph. I REALLY like the idea of looking the cumulative burden of employer-born costs of employees as the percentage of dual earners goes up. my "bet" is that you'd find that the cost of those benefits have been growing at par with the women's labor force participation rate. Take a look at the charts in the Slate Star Codex post on Cost Disease, and overlay the growth in Women's labor force participation rate, and growing pay equality. The relationship is likely not perfectly causal, but there might be a meaningful effect in there.
- runT1ME 9y ago
  Why would we have the same number of jobs? If more women are working who didn't before, they will need some way to commute to said job, to buy work clothes as well as leisure clothes, have more disposable income, etc.
  - eric_b 9y ago
    Yep, that's why I said "it's obviously not that simple". I also described "downward pressure" on wages, not a cutting of wages in half.
sonnyz 9y ago
The number of jobs in the U.S. has been increasing pretty steadily. You can look for the years in question here: https://data.bls.gov/timeseries/CES0000000001 https://data.bls.gov/timeseries/CES0000000001
- nnfy 9y ago
  That alone isn't enough data to answer the question. I arbitrarily picked 1962 as a starting point, and while the number of employees since then has approximately tripled, the population of US citizens has approximately doubled, in addition to the gradual entry of women into the work force. Additionally, the page you linked shows number of employees, and does not account for the possibility of multiple jobs effectively replacing the work of one person because of job market saturation, and an associated depression of wages.
twobyfour 9y ago
It's not sexist to suggest increasing labor supply due to women's entry into the workforce might factor into decreased prices. (Though women were always in the workforce to a greater extent than many 1950s nostalgics want to admit, just in lower prestige and lower wage jobs). What would be sexist would be to suggest that the solution is to exclude women from the labor force in the future.
- watwut 9y ago
  The nostalgic like to treat idealized middle class as standard - ignoring everyone else and ignoring most problems society had.
clairity 9y ago
no, that is quite unlikely to have much explanatory power here. you're applying static thinking to a dynamic system. women have been integrating into the work force for the past 100 years. it wasn't an instantaneous doubling all of the sudden. consumption grew in lock-step with labor supply over those many years, so labor demand rose as well to meet the new consumer demand. a so-called virtuous cycle. wage stagnation is tied to the growing wealth of the top 1%, not working women.
hackuser 9y ago
> I've wondered purely out of curiosity if the decline in wages is related at all to the entry of women into the work force Adding workers adds wealth per capita; it's not a zero-sum situation. Adding more workers to the economy grows the economy, by more than the salaries of those workers (if they cost more than they produced, they wouldn't be hired). Now all these women are producing value, they increase productivity, and they also can afford to buy things from you. Consider it this way: Where would you rather open your store, a town where only the men work, or where both the men and the women work?

folli 9y ago

Summary: On average, workers born in 1942 earned as much or more over their careers than workers born in any year since The trend has also widened the gap between the rich and everyone else as, overall, the economy has continued to grow overall but the bulk of those gains have ended up in the pockets of the affluent. While economists have been concerned about recent data on earnings, the new paper suggests that ordinary Americans have been dealing with serious economic problems for much longer than may be widely recognized. The new research shows that in the past, a good guide to forecasting typical career earnings among Americans of a given age has been their average income they were 25. Young workers’ incomes are still declining today, suggesting that their trajectories over the rest of their careers will be lower as well.

TimPC 9y ago
I suspect that the at 25 income prediction will be less and less accurate as a predictor given high value PhD's. In the past the rarity of those programs might have covered up the problem with using those estimates for that group, but as it grows it probably creates substantial challenges for such a metric. Similarly, with start-ups becoming more popular, income at Age 25 might value options at 0 and lead to an underreported value for anyone in a successful exit. Willingness to take risk with low income when young, might also lead to situations where founders are reporting 0 income at 25, but are likely to have successful careers regardless of whether they exit.
- HeyLaughingBoy 9y ago
  Still, relative to the population at large, the number of PhD's and startup founders isn't even a droplet in the bucket...
- Jare 9y ago
  High value PhDs should not be a significant portion of the statistic for the entire country.
- Thrymr 9y ago
  Statistically, those high value PhDs and successful exits are way off on the high end of the tail of the distribution for all 25-year-olds. I suspect they are not going to budge the median values at all.

DiffEq 9y ago

The middle class is decreasing mainly because of divorce and thus the creation of single parent homes; additionally middle class families leave the middle class because BOTH parents work and thus moving them into the upper class - when if one of them worked they would stay in middle class.

nnfy 9y ago
I don't think that's true. While the term is of course loosely defined, unless you are at the top of the middle class, you can't leave the middle class by simply doubling income.
thesagan 9y ago
Sounds more like a symptom than a cause, and even that's guessing at best.
pdelbarba 9y ago
This doesn't make any sense. Just because divorce rates have gone up somewhat since the 40s doesn't mean that it's structural. People get remarried. Also, if one person makes 60k and then moves in with another person making 60k, they don't magically become upper class at 120k, because they still have most of the expenses of two people minus some savings in housing (which most people wave by buying huge houses) Edit: and 120k/yr is nowhere near "upper-class"
- clairity 9y ago
  actually, if you define upper class as the top quintile in household income (a common objective definition, as opposed to the also common colloquial "how you feel" definition), then anything above $112K in household income is upper class: http://www.taxpolicycenter.org/statistics/household-income-quintiles http://www.taxpolicycenter.org/statistics/household-income-q...
  - sp332 9y ago
    In a CNBC Millionaire Survey it can be observed that a majority of millionaires polled, representing the wealthiest 10 percent of Americans, described themselves as middle class (44%) or upper middle class (40%)... Estimates for the size of this group [upper class] commonly vary from 1% to 2%, while some surveys have indicated that as many as 6% of Americans identify as "upper class." https://en.wikipedia.org/wiki/American_upper_class https://en.wikipedia.org/wiki/American_upper_class

eric_b 9y ago

I take most of these articles with a grain of salt. The Washington Post has not (lately, at least) been a source of hard hitting analysis. Additionally, this study has not been peer reviewed, but they certainly treat it as though it has. Looking at the charts and the analysis - one concern raised is that workers starting out in 2010 had lower real wages than their counterparts from 1969. A really simple explanation might be that in 2010 we were still in the deepest part of the biggest recession in recent history. What do you think that would do to starting wages? I know there is a narrative they are trying to tell, but in the past 12-24 months they are so obviously biased I simply don't believe anything they write anymore. Edit: I might add that I worry very much about the decline of the middle class. The problem is I don't trust any news source to tell me objective truths, and the more I dig for this information the more the black and white rhetoric doesn't seem to fit.

edc117 9y ago
Thank you, I'm glad to see another comment like this. I've also started avoiding WP for similar reasons; it feels as though they've been trying to become Fox News for the left, which is not what I'm looking for in journalism. More and more it feels like discussion is being dominated by irrational actors, and news orgs pander to this for eyeballs.
hn_throwaway_99 9y ago
You are cherry picking on the 2010 issue. The graphs show lines for the beginning of every decade since 1980. The year 2000 was basically the peak of the .com bubble, and it still showed 25 year olds making less than 25 year olds in 1980. I get your point about selecting data from any individual year, but the trend lines shown in the graphs cover entire periods.

neves 9y ago

When the syndicates stopped to get some respect from workers? It looks like correlated to the lowering of wages.

TimJYoung 9y ago

The peak for the average worker seems to revolve around 1965-1970, based upon various stats that I've read. This jives with my personal experience also. My father, who was employed in manufacturing as a foreman (and later, cost accountant, after earning his degree), was on his way up until the late 1970s. It was right around that time that manufacturing operations in the midwest and northeast started their first moves toward lower labor costs by relocating plants to the south and southeast (later, even this would not be enough and they would move to Mexico, China, etc.). The main purpose seemed to be union-busting. It practically killed our family, financially. My parents used up all of their savings (quite a bit, I might add) while my father tried, in vain to find employment. They had to sell their custom-built dream home (think modest 70s home, not modern McMansion monstrosity), and we were, technically, homeless for half a year while we lived with my aunt/uncle. My father eventually found employment as a cost accountant, but we had to uproot our lives and move to Florida. And, more importantly, my father's real earnings never recovered and he never got back to the level he had previously earned. There's a lot of evidence to show that all of this was intentional and orchestrated: http://www.laborrising.com/2013/07/union-organizing-and-the-business-roundtable-and-american-labor/ http://www.laborrising.com/2013/07/union-organizing-and-the-... Note, this was written in 1979, after about 10 years of the effects of the efforts of organizations like the Business Roundtable. BTW, I can't help but add: the small hometown where I grew up in the midwest now has a pretty bad Oxy/Heroin/Meth problem on its hands.

prostoalex 9y ago
> The peak for the average worker seems to revolve around 1965-1970 The era also coincides with massive amounts of women entering the workforce.
- TimJYoung 9y ago
  Yes, but they weren't closing and re-locating entire manufacturing plants because women were entering the workforce.

tboyd47 9y ago

I wonder when it is going to become clear that America's economic growth has peaked. I recently read that Warren Buffet made the point in 2006 that in order for America to continue growing as it has for the last century, the Dow would have to surpass 2,000,000 by 2099, and during the years 2000-2006, it didn't grow at all from its place at roughly 11,000 (but now it appears to be growing again). Sidestepping the question of whether or not it has peaked, and when that peak was/is, it seems to be in everyone's best interest to at least pretend that it has not, and perhaps, will never.

hackuser 9y ago
> America's economic growth has peaked I assume you mean, the size of the economy has peaked. The rate of growth was never thought to be increasing (i.e., it didn't grow 4% one year, 4.1% the next, etc.). This question is answered by well-known data, GDP growth. That popular number represents, effectively, the increase in the economy's size every year. The U.S. economy has grown and continues to grow every year since 1950, with the only exception being 2008, the worst year of the Great Recession. http://www.multpl.com/us-gdp-growth-rate/table/by-year http://www.multpl.com/us-gdp-growth-rate/table/by-year
- 101km 9y ago
  I believe parent is saying "Peak GDP".
  - hackuser 9y ago
    What does that mean? If it means, literally, U.S. Gross Domestic Product has reached its peak, then my point that the GDP has grown every year but one since 1950 answers the question. To be clear: Every year since 1950, except one, the U.S. GDP has been larger than the year before.
    - 101km 9y ago
      It is similar to "Peak Oil". Things are finite, nothing grows forever.

golemotron 9y ago

Technology is the elephant in the room, isn't it? It's possible to make money with fewer and fewer employees, and it takes less money to meet our basic needs and entertain ourselves. The result is declining birth rate and income. It is going to continue in this direction and we don't know what to do about it.

FullMtlAlcoholc 9y ago
Has the percentage of income spent on food and housing gone down?

rdlecler1 9y ago

The article also doesn't take into account education and housing debt. Not only do you make less, more of what little you make goes toward things that would have been paid off after a few years. Add to that the expectation that the younger generation is footing the Medicare and social security bill for baby boomers and you have a case of generational servitude.

cowardlydragon 9y ago
Um, you forgot the healthcare cost explosion. And the fact that we will never see a dime of Social Security.

tomjen3 9y ago

I have seen a ton of these kinds of articles posted here over the years, but none of them touches on what PG wrote in one of his essays: the reason salaries were so high after the war and until the 70is were that the US was the only country that had a modern, intact industrial base and so it was worth it for the companies to overpay for labor, in the same way that it is worth it for a start-up to overpay for e.g servers. Later, after the boom, they started to cut their overspending.

6stringmerc 9y ago
So where did the "excess" from the "overspending" go in your model? Surely it didn't bring up the standard of living worldwide, because we'd have noticed it by now. No, your term "overspending" is far too loaded for me to believe in. I am far more inclined to believe the Investor Class has been doing their damndest to widen the wealth gap at every opportunity since WWII, and wouldn't you know it, all the numbers add up. It's much more like there was a healthy dynamic between management, investors, and the working class, and it's all been shot to shit in the name of quarterly profiteering and Ayn Rand "bootstrap" delusions.
- mistermann 9y ago
  The Ayn Rand I know would throw all of our modern "capitalists" in prison for their theft, deceit, and immoral desire for the unearned. Best not to get your opinions second or third hand from the deliberately dishonest.
- cvwright 9y ago
  > Surely it didn't bring up the standard of living worldwide, because we'd have noticed it by now. But the worldwide standard of living has massively increased over the past 50 years.
- tomjen3 9y ago
  After World War II, about the time the US was about to begin its boom, people in Holland had to go out near the coal trains so that they could pick up whatever coal had fallen off the trains, or they would have nothing to heat their homes with; Germany was flattened as was Japan and Korea. Meat rationing in the UK did not end until July 4, 1954 – that's almost a decade after the war. Japan did not start getting back on its feet until the Korean War. I have been to Germany and I can personally assure you that the life they live now is nothing like it was in 1950. So yeah, there's your rising standard of living worldwide. Key point _worldwide_, although some of it also happened to US.

nimos 9y ago

I think it is actually a lot worse than household incomes suggest. Having a parent stay home is tremendously valuable to a household in providing childcare, food preparation and all sorts of other valuable labour. None of this gets measured in incomes/GDP but as soon as you have both parents working and paying for childcare, paying for prepared meals and so on it does get measured in household income and GDP. So when we just look at household income we're actually underestimating the decline because there also used to be more unmeasured value provided by stay at home parents.

tailrecursion 9y ago

When I see a statement such as, Income in men declined 10-19% over several decades, I think: OK. Why? Is the ratio of young/old different from before? Were those living on social security included in those stats? What does that have to do with wages? Is it because men are choosing different jobs? Is it because they are working fewer hours? Is it because they are choosing to earn less, because cable TV and internet connection are enough? Is it because cars cost less? Is it because, generally over the population, men are choosing activities other than work? Is it because feminists have changed women who have changed men into deciding not to marry women, generally over the population, which reduces the drive or opportunity to pursue larger incomes? Is the pay hidden somehow, more now than before, going to medical costs instead of salary? The conclusions in the news article depend heavily on definitions for "middle class" and "workers" and seem to assume that wealth equals money and that income equals wages.

Spooky23 9y ago
Consider that women and African Americans were exclusively fenced off on the fringes of the workforce. Between increased domestic supply of workers, increased supply of foreign workers, globalization and demographic drag as we need to pay the pensions of the baby boomers with smaller cohorts of workers. Combine that with anti-labor policies and its a no brainer why earnings are dropping.

prewett 9y ago

I thought the question was going to be "why?" but instead the question they purported to answer was "when did it start?" Kind of a click-baity headline by the WP; I wish they had a "did not meet expectations" button :(