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US Wages Finally Get Back to Where They Were in 1973
- SlipperySlope 7y agoHigh tariffs on imports help to bring back USA manufacturing no doubt. All sufficiently large economies should protect their domestic industries with tariffs. Otherwise its a race to the bottom for labor wages.
- Bombthecat 7y agoStory time : from my boss his son is specialized in factory logistics for production lines. He helps plan to build streets transportation plans how much when where how etc. He looked into jobs in us and Japan / China. When he looked at the US it was basically : planning canceled, canceled, stopped, pushed back for later etc etc. So he moved now to China. So, from a data point of one. It does not look so great...
- tonyedgecombe 7y agoThen your own industries will become complacent, leaving everybody poorer.
- s3r3nity 7y agoTo be precise, for "production" and "nonsupervisory" workers. Doesn't say anything about the size of this population, and how representative it is of the general earnings potential of the US as a whole.
- Fifth_Star 7y agoProduction and non-supervisory is most people
- AnimalMuppet 7y agoIt's probably less "most people" than it was in 1973, though.
- conception 7y agoWhy would that be the case? Has there been a significant spike in farm workers or managers per capita?
- AnimalMuppet 7y agoWell, I was assuming that people like engineers and programmers weren't "production". There are more of them now than there were in 1973, and fewer factory workers.
- conception 7y agoYeah, for service industries, it counts anyone not in a supervisory role, so it'd include them as well. :)
- JohnFen 7y agoMaybe, but I can't tell by looking. It appears to be roughly the same to me. But my subjective assessment is meaningless. We'd need data.
- conception 7y agoThis pool of workers includes those in manufacturing and construction jobs, as well as all “nonsupervisory” workers in service industries such health care or fast food. The group accounts for about four-fifths of the privately employed workers in America, according to BLS.
- NoblePublius 7y agoHow much did a 55” LCD TV cost in 1973? Cuz they’re $249 now.
- thfuran 7y agoGreat. Now let's do college.
- NoblePublius 7y agoThank you for proving my point that life is very different today than it was in 1973, and that comparing wages across decades is dumb
- asark 7y agoYou're gonna need to connect the dots for us here re: why that necessarily makes the comparison dumb.
- ska 7y ago“Proving” You keep saying that word. I do not think it means what you think it means.
- cptskippy 7y agoWhat is your point? That because TV production has largely become automated and those reduced labor costs have brought prices down significantly, that the cost of living has also magically come down?
- LookOutItsABot 7y agoAre you real; standardized responses or just lazy copy paste?
- imtringued 7y agoYeah but the comments you are replying to don't talk about wages. They only offer counterpoints that disprove your original assertion: prices didn't go down in every sector.
- NTDF9 7y agoPhew. It only took pumping some trillions into the pockets(assets) of multimillionaires to finally trickle down to 1973 levels.
- jackfoxy 7y agoYes, but if you look at the chart, most of the loss occurred in the decade of the 70s, before any talk of trickle down economics. From the end of the 82 recession until the mid nineties the erosion continues, but at a much slower pace, closer to being static until the trend starts a long slow ascent, close to 25 years to recover what was mostly lost in 10.
- NTDF9 7y agoWhat does that trend line look for top 1%?
- lokidokiro 7y agoAnother way of writing the same title that sounds completely different: "Inflation adjusted US wages reach highest level since 1973." I'll never understand what compels journalists (or wannabe journalists) to insert words like "finally" into their headlines. It would have been just fine without that one word.
- mabbo 7y agoBecause the GDP growth in that time is staggering, yet workers have shared in none of it. If the proportion of the country's earnings going up labor had been maintained, the average wage would be double.
- aristophenes 7y agoOr "Inflation adjusted US Wages hit a new all time high, first since 1973". There really are not a lot of ways to spin this in a negative way, but somehow they did it. Why try to make people feel depressed about it? It's great!
- kaycebasques 7y agoNow that I’m a bit older (29) it’s fascinating to reflect back on my childhood and teenage years in the context of economic trends. I’ve been interviewing my grandpa to make a biography of his life and it’s mind-blowing to hear about how different the 50s were. A teacher (grandpa) and a part-time worker (grandma) supporting 2 babies and a senior (great grandma), yet still able to buy a home in Millbrae and a plot of land in Tahoe (which my family still has to this day). And then the decline of the 70s, 80s, and 90s, and I put the histories of my mom and dad and their generation into that context. It brings a whole new dimension to my understanding of them.
- mertd 7y agoWe also got this little thing called Prop 13 in California between then and now. That and we figured out how to make really tiny transistors and the entirely new industry set up shop here.
- kaycebasques 7y agoFor sure, there’s myriad factors. And the Bay Area has its own unique history. My main idea is that studying economic history has provided a rich layer of new understanding about the lives of my family.
- newsoul2019 7y agoAs someone who is not from the Bay Area, lives currently in the Bay Area, is not wealthy, and from a family that is not wealthy: I spend a lot of time ( too much time ) trying to figure out how everyone around me is wealthy. There are a lot of paths to wealth. The most common elements are previous family wealth, hard work, frugality, but also really good long-term decision making ( keep the first house you buy forever ) and skills that can't be taught (sheer will and ambition).
- almost_usual 7y agoMy grandpa became a multi-millionaire even though he dropped out of middle school. Born into a working class German family where no one really valued education. Good luck doing that now. Grammar edit, guess we still don't value education.
- drvbipstr 7y agoLooks like the economy is finally turning good.
- avengersunite 7y agoUS economy is at an amazing position currently. Even though it has a smaller share of the global economy than 1960s (40% then vs 22% now), the 60s was an anomaly as most of Europe and Asia's economies were decimated from the war - the jump in worldwide prosperity is a lot better for the human species. US economy is the biggest in the world, twice as big as the next country, and 5 times bigger than Japan, and 6 times bigger than Germany. It has survived stagflation and oil crisis in the 70s, and globalization in the 80s and 90s. The US economy is much diversified - from tech in Silicon Valley, entertainment in Hollywood, oil and gas in Texas, tourism in Florida, finance and fashion in NY, agriculture, manufacturing, services, etc - and safer from systemic shocks from a loss of one particular industry. Capital is freely flowing into US - and away from emerging countries. US growth is in the 3%, while Japan/Germany is close to recession, and China is experiencing its own great depression.
- A2017U1 7y ago> US economy is the biggest in the world, twice as big as the next country, and 5 times bigger than Japan Nominally yes, but PPP is generally more apt. > GDP comparisons using PPP are arguably more useful than those using nominal GDP when assessing a nation's domestic market because PPP takes into account the relative cost of local goods, services and inflation rates of the country, rather than using international market exchange rates which may distort the real differences in per capita income. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
- binalpatel 7y agoInflation adjustment is weird across time and geographies. I'm not saying the article is wrong, but just something to keep in mind. In 1973 the internet was nascent, we didn't have smartphones, insulin was still hard to produce, and so on. Even making the same amount "inflation adjusted" as 1973, our lives are much richer in part to all these advances. As an example - it's likely in adjusted terms someone in the top 1% a 100 years ago would be close to the top percentiles today, and yet it's pretty easy to argue that the average person today is still doing much better in almost any measure than a 1%-er from a century ago.
- coldtea 7y ago>Inflation adjustment is weird across time and geographies. I'm not saying the article is wrong, but just something to keep in mind. In 1973 the internet was nascent, we didn't have smartphones, insulin was still hard to produce, and so on. Even making the same amount "inflation adjusted" as 1973, our lives are much richer in part to all these advances. Or much poorer. Smartphone means FOMO, constantly accessible to bosses, less interaction and more wasted hours with BS apps (people are starting to treat it as addiction), and the "easier to produce insulin" is balanced by skyrocketing healthcare costs, much more stressful lives (including being worked to the bone, and with no "company loyalty" anymore), and loss of quality of life in many important ways... It's just that for many US people, "access to BS gadgets" (which nobody missed in the 70s because they didn't exist anyway) trumps other qualitative life factors that don't even register. I think e.g. Europeans would appreciate those much more... >As an example - it's likely in adjusted terms someone in the top 1% a 100 years ago would be close to the top percentiles today, and yet it's pretty easy to argue that the average person today is still doing much better in almost any measure than a 1%-er from a century ago. Regarding quality, meaning of life, friends, lifestyle, etc, or just based on access to stuff?
- supersleepgrump 7y agoI really think these numbers are antiquated, and with modern data science, a more robust picture of wages and employee compensation will emerge. The median salary only accounts for the top 30% of Americans, and almost every job that pays more than $23/hr requires a college degree, not to mention that training / education / certification is financed through families and individuals, increasing their debt burden, which brings down their real wages. And that's one parameter, individual debt has also been increasing, as well as the gradual decline of the interest rates since the 70s. All-in-all the bigger picture is more complex, and with every metric of inequality increasing, globally, I think the numbers calculated for inflation adjusted average wages for production and non-supervisory workers are antiquated.
- bfrydl 7y ago> The median salary only accounts for the top 30% of Americans I'm not a mathematician but this doesn't sound right to me.
- username90 7y agoIt can be true if median salary only counts people with a job.
- nostrademons 7y agoWow the 1970s were not kind to inflation-adjusted wages. It's interesting to look at this graph through the lens of demographics & generations. The post-war wage boom from 1949-1963 corresponds almost exactly to when the Silent Generation (those born during the baby-bust years of the Depression & WW2). The peak of the graph in 1973 corresponds to the initial entry of the peak of the Baby Boomers (1955) into the workforce. There's a rise from the 90s onwards corresponding to Gen-Xers entering the workforce (at 22 now, since college degrees have become more prevalent) and the G.I. Gen retiring, but it stalls out in 2005 just as the first Millenials start entering the workforce. Maybe there's actually something to the Econ 101 models about factors of production and how a relative shortage of labor increases labor's share of national income relative to capital while a glut does the opposite. HS-educated members of generation after Millenials (born 2001-onwards, and tiny - fertility has been dropping to record lows) start entering the workforce in 2019; college-educated ones in 2023, and the peak of the baby-boomers starts retiring in 2020. Perhaps we'll see another sharp rise in wages in the near future, assuming we don't destroy ourselves because of the coming stock market crash as all the baby boomers try to cash out their 401(k)s at once.
- RickJWagner 7y agoThank goodness the trend line is moving in the right direction. It'd be terrible if we got this news and the trend was downward (getting worse).