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One thing to keep in mind: It's easy to think of stagnant wage levels as implying that everyone is working the same jobs and getting 2% nominal raises per year.

One thing to keep in mind: It's easy to think of stagnant wage levels as implying that everyone is working the same jobs and getting 2% nominal raises per year. Another possibility is that a subset of the population is seeing real wage growth while a different subset is being pushed into lower-wage jobs by automation and/or outsourcing. The hivemind of Trump supporters would have you believe the latter, and while I'm decidedly not one of them, that explanation definitely strikes me as more plausible. Though I'd contend that there are probably 3 buckets, not 2: - Those who work in highly-paid fields that aren't vulnerable to automation or outsourcing, including those who are driving the automation and outsourcing of other fields. These people see real wage growth. - Those who work in relatively low-wage jobs (e.g., in the service sector) that are prone to automation and/or outsourcing, but for whom automation has been gradual because their low wages mitigate the benefits of automation and outsourcing. For these people, I suspect that real wages are more or less stagnant - they have no leverage since their jobs could be at least partially automated if it were worthwhile to do so, but it hasn't been worthwhile yet. - Those who work in highly-paid fields that are susceptible to automation and/or outsourcing. Many of these jobs have been automated and/or outsourced due to the significant cost savings from doing so, pushing these people into lower-wage jobs. These are the coal miners and skilled tradespeople who form the core of Trump's voting base. Of course, there are jobs that don't fall cleanly into any of these buckets - lawyers are a good example - but my impression is that this is still a good model for understanding wage levels for many jobs. Obviously I'm speculating quite a bit here (though BLS projections seem to support my argument [0]), so please let me know if you know of any evidence that contradicts this. [0] https://www.bls.gov/emp/tables/industries-large-grow-decline-employment.htm https://www.bls.gov/emp/tables/industries-large-grow-decline...

marcoperaza 8y ago
The numbers are pretty clear. The top 20%, which roughly correlates to the college-educated professionally-employed class, has seen their real income and social welfare steadily go up for the last half century. The bottom 80% has seen stagnation and decline, as well as increased social ills like drug addiction, broken homes, and so forth. Notably, this pattern exists even if you look at just white people, so a racial explanation won’t do.
- refurb 8y ago
  Declines wages for the poorest are only true if you ignore non-monetary compensation (e.g. benefits) and government transfers (EITC). Not really fair to compare it that way.
  - IkmoIkmo 8y ago
    Yup. Real median personal income in the US is up. [0] Although there have been few gains in the past decade. It's a pretty decent measure of the average American. It's also a bit better than wages as a measure of average citizen's purchasing power. After all, wages are linked to having a job. The 20th century saw substantial emancipation and the end of high degrees of exclusion of minorities, particularly women. As they entered the workforce, real wages may have decreased slightly on average, i.e. men were earning slightly less per job, and women were earning significantly more, which is why you can see average wages decline while average personal income increases. [0] https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N

marcoperaza 8y ago

The numbers are pretty clear. The top 20%, which roughly correlates to the college-educated professionally-employed class, has seen their real income and social welfare steadily go up for the last half century. The bottom 80% has seen stagnation and decline, as well as increased social ills like drug addiction, broken homes, and so forth. Notably, this pattern exists even if you look at just white people, so a racial explanation won’t do.

refurb 8y ago
Declines wages for the poorest are only true if you ignore non-monetary compensation (e.g. benefits) and government transfers (EITC). Not really fair to compare it that way.
- IkmoIkmo 8y ago
  Yup. Real median personal income in the US is up. [0] Although there have been few gains in the past decade. It's a pretty decent measure of the average American. It's also a bit better than wages as a measure of average citizen's purchasing power. After all, wages are linked to having a job. The 20th century saw substantial emancipation and the end of high degrees of exclusion of minorities, particularly women. As they entered the workforce, real wages may have decreased slightly on average, i.e. men were earning slightly less per job, and women were earning significantly more, which is why you can see average wages decline while average personal income increases. [0] https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N