5 ms·

Per Congressional Research Service, real wages have been flat or declined since 1979 for all but the rich [1]. No 'clickbait titles'. [1] https://fas.org/sgp/c

Per Congressional Research Service, real wages have been flat or declined since 1979 for all but the rich [1]. No 'clickbait titles'. [1] https://fas.org/sgp/crs/misc/R45090.pdf https://fas.org/sgp/crs/misc/R45090.pdf

IkmoIkmo 8y ago
As you can see from my post referencing journalism in Europe, I'm not referring to the US case. You'd also see that my post referenced income, not wages. An important distinction, and exactly the kind that journalists don't make when they say 'incomes aren't rising' when they are, and point only to one metric (real wages) to prove it. In a sense your post is a bit ironic. Hourly wages are absolutely important, but your own research example itself indicates it's not the end-all metric, either. For example, your study mentions a period where real wages fell, but overal compensation remained stable, due to other non-wage benefits compensating for the loss in wages. In fact, your study mentions quite clearly that health-benefits are left out of the study, despite being quite a unique aspect of private labor compensation in the US (whereas most other countries have publicly funded healthcare) and healthcare being a key category of high-inflation. So you're counting the inflation to adjust the purchasing power of wages, but you're not counting non-wage compensation of healthcare-benefits which have risen sharply. The study of course also doesn't take into account employment changes, as the study carefully points out. i.e., the sharp increase in labor force participation of women age 25-54 in the past 2 generations, isn't taken into account if you're talking about income, only the fact the median women earns 25% more. That understates improvements in income. Where you went from 4/10 women earning $10 an hour, to now having 7/10 women earning $12.50 an hour, that'd an increase of 118% in the total income earned by women, while real wages 'only' grew by 25%. Rather than control for each individual confounder, one can better just look at real median personal income. https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N And you find it's 40% higher than in 1979. This metric isn't perfect either, but it does a better job than just looking at hourly wages for working people. Lastly, there are some apples / oranges comparisons still left in inflation. Healthcare inflation is tricky to measure and is mostly done on a price-basis. That's different from other goods, e.g. the price of a harddrive, which goes up in nominal terms (a typical harddrive costs more than 10 years ago in dollar terms), but is adjusted for the fact it's 10x larger than it was 10 years ago. In healthcare however, we don't take into account that life expectancy has improved by about half a decade in 1979. Sometimes we tend to forget our lives are outpacing increases in pension age, i.e. we live longer and with more leisure. This, too, is a form of wealth and could be expressed as income. Instead, the only thing we tend to point to is that our healthcare costs are up, and thus if we adjust our wages by these costs (and then subsequently leave out non-wage compensation that pays for healthcare and retirement), observe that our wages are down or flat in real terms. That's short sighted. But more importantly, I wasn't referencing the US at all.

IkmoIkmo 8y ago

As you can see from my post referencing journalism in Europe, I'm not referring to the US case. You'd also see that my post referenced income, not wages. An important distinction, and exactly the kind that journalists don't make when they say 'incomes aren't rising' when they are, and point only to one metric (real wages) to prove it. In a sense your post is a bit ironic. Hourly wages are absolutely important, but your own research example itself indicates it's not the end-all metric, either. For example, your study mentions a period where real wages fell, but overal compensation remained stable, due to other non-wage benefits compensating for the loss in wages. In fact, your study mentions quite clearly that health-benefits are left out of the study, despite being quite a unique aspect of private labor compensation in the US (whereas most other countries have publicly funded healthcare) and healthcare being a key category of high-inflation. So you're counting the inflation to adjust the purchasing power of wages, but you're not counting non-wage compensation of healthcare-benefits which have risen sharply. The study of course also doesn't take into account employment changes, as the study carefully points out. i.e., the sharp increase in labor force participation of women age 25-54 in the past 2 generations, isn't taken into account if you're talking about income, only the fact the median women earns 25% more. That understates improvements in income. Where you went from 4/10 women earning $10 an hour, to now having 7/10 women earning $12.50 an hour, that'd an increase of 118% in the total income earned by women, while real wages 'only' grew by 25%. Rather than control for each individual confounder, one can better just look at real median personal income. https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N And you find it's 40% higher than in 1979. This metric isn't perfect either, but it does a better job than just looking at hourly wages for working people. Lastly, there are some apples / oranges comparisons still left in inflation. Healthcare inflation is tricky to measure and is mostly done on a price-basis. That's different from other goods, e.g. the price of a harddrive, which goes up in nominal terms (a typical harddrive costs more than 10 years ago in dollar terms), but is adjusted for the fact it's 10x larger than it was 10 years ago. In healthcare however, we don't take into account that life expectancy has improved by about half a decade in 1979. Sometimes we tend to forget our lives are outpacing increases in pension age, i.e. we live longer and with more leisure. This, too, is a form of wealth and could be expressed as income. Instead, the only thing we tend to point to is that our healthcare costs are up, and thus if we adjust our wages by these costs (and then subsequently leave out non-wage compensation that pays for healthcare and retirement), observe that our wages are down or flat in real terms. That's short sighted. But more importantly, I wasn't referencing the US at all.