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I'm not the OP, and they may be overstating statistics (happy to be shown otherwise). At the same time, wage stagnation is no myth: "From 1973 to 2013, hourly

I'm not the OP, and they may be overstating statistics (happy to be shown otherwise). At the same time, wage stagnation is no myth: "From 1973 to 2013, hourly compensation of a typical (production/nonsupervisory) worker rose just 9 percent while productivity increased 74 percent. This breakdown of pay growth has been especially evident in the last decade, affecting both college- and non-college-educated workers as well as blue- and white-collar workers. This means that workers have been producing far more than they receive in their paychecks and benefit packages from their employers."[0] "The minimum wage peaked in inflation-adjusted value in 1968, when it was equal to $10.15 in 2018 dollars. [...] As of 2018, the federal minimum wage was worth 28.6 percent less than in 1968" [1] "While the cost of a four-year degree exploded to $104,480 [from $52,892 adjusted for inflation], real median wages only went from $54,042 to $59,039 between 1989 and 2016." [2] Heavy childcare costs [3] "In U.S., wage growth is being wiped out entirely by inflation" [4] [0]https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/ [1] https://www.epi.org/publication/raising-the-federal-minimum-wage-to-15-by-2024-would-lift-pay-for-nearly-40-million-workers/ https://www.epi.org/publication/raising-the-federal-minimum-... [2]https://www.forbes.com/sites/camilomaldonado/2018/07/24/price-of-college-increasing-almost-8-times-faster-than-wages/#39068b4066c1 https://www.forbes.com/sites/camilomaldonado/2018/07/24/pric... [3]https://data.oecd.org/benwage/net-childcare-costs.htm https://data.oecd.org/benwage/net-childcare-costs.htm [4]https://www.washingtonpost.com/business/2018/08/10/america-wage-growth-is-getting-wiped-out-entirely-by-inflation/?utm_term=.46fc10bbb5da https://www.washingtonpost.com/business/2018/08/10/america-w...

ta1234567890 7y ago
Thank you for putting all of that info together in a very easy way to read and to follow the sources.
xyzzyz 7y ago
The productivity and wage decoupling is very hot debate topic in the economic circles. It's not very easy to sum it up, as there are many factors going in. For example, productivity is calculated based on real GDP, which uses GDP deflator, while deflator for real wages that is typically used is CPI. Just the fact that you're using two different deflators already makes a meaningful comparison harder. Looking at minimum wage is not really relevant, as only around 2% of workers earn minimum wage. The degree cost explosion is very unfortunate, not only because it is more expensive now, but also because much fewer people had (or even attempted to obtain) degrees, so not only it was much cheaper for them, but also they simply didn't need to get them as much as people need them now. The push for universal tertiary education has been very detrimental to our society, as people need to spend more, and the only result is degree inflation.
- epiphanitus 7y ago
  Hey where can I read more about this? You got me curious...
  - xyzzyz 7y ago
    Scott Alexander has a good entry level write-up[1]. He is not an economists, he tries to understand the debate as a lay-person, so it doesn't cover it all, but should give you some taste of the complexity involved. For an actual economist, see e.g. Scott Sumner[2]. [1] - https://slatestarcodex.com/2019/02/25/wage-stagnation-much-more-than-you-wanted-to-know/ https://slatestarcodex.com/2019/02/25/wage-stagnation-much-m... [2] - https://www.econlib.org/the-wage-decoupling-mess/ https://www.econlib.org/the-wage-decoupling-mess/
- opportune 7y ago
  Only about 2% of workers may earn minimum wage, but the minimum wage serves as a kind of anchor that other very-low pay jobs base their pay on. Many major national fast food chains (for example) pay like $8/hr which isn't technically minimum wage but is essentially the same, because if the minimum wage were $5/hr these jobs would probably similarly pay $6/hr or therabouts
oldjokes 7y ago
The really weird thing about wage stagnation is that there are millions of jobs going unfilled, companies are so desperate for people that they can't find anyone and are just dumping cash into stock buybacks instead of raising wages. Something is fundamentally broken in the labor market, it is not responding to supply & demand forces as it has in the past. I am not sure what terminology to use to describe what's going on now, but it's not a free labor market any more, it has been destroyed or transformed into some other construct.
- SolaceQuantum 7y ago
  IIRC Wages have been growing (modestly). [0] [0]https://www.vox.com/2019/5/3/18528010/april-2019-jobs-report-wages https://www.vox.com/2019/5/3/18528010/april-2019-jobs-report... (I know this isn't the best one, but I can't find the Reuters one that also states similarly)
- Ancalagon 7y ago
  Actually I would argue companies just don't want to pay the wages that Americans would expect for the labor. Raise the pay, you'll see those positions get more qualified candidates and then they will be filled.
  - fma 7y ago
    Anecdote...I had a random chat with a hiring manager and he commented he can't hire the right developers. Developers think too highly of themselves and ask for too much money...I had no sympathy for him.
- jjoonathan 7y ago
  They don't need people. They always complain about needing people because it's always in their interest to do so, but the fact that they don't just raise wages strongly suggests that they don't know how to profitably employ additional people and that "we need people" is just a bunch of hot air. This dilemma, and many like it, vanish entirely if you stop paying attention to what people say and start paying attention to what they do.
akeck 7y ago
I found a pay stub from a temp agency from the early 90s. I was earning $7.50/h to stuff envelopes. $14.07 in 2019 dollars.
jraby3 7y ago
That’s widely quoted but turns out to be incorrect. https://twitter.com/jmhorp/status/1125468274995675138 https://twitter.com/jmhorp/status/1125468274995675138
- xyzzyz 7y ago
  This is interesting, and I started clicking through some of these threads, but Twitter is just such a terrible format for it that I soon gave up.
- ranie93 7y ago
  They claim "median personal income for ALL AGES us up 394.4% since 1977". However a quick check on FRED [0] tells me this figure is way off: 1977: $23,202 2016: $31,099 (2017 not available in the data) ~34% increase They said they had sources but I only see sources for the price of bread claim. Maybe they aren't looking at real wages? In which case the claim is very misleading. I also agree twitter's thread layout is hard to follow. [0]https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
  - xyzzyz 7y ago
    Yes, they aren't looking at real wages, that's the whole point of the comment: they are comparing the inflation of bread price with the nominal growth of median personal income.

ta1234567890 7y ago

Thank you for putting all of that info together in a very easy way to read and to follow the sources.

xyzzyz 7y ago

The productivity and wage decoupling is very hot debate topic in the economic circles. It's not very easy to sum it up, as there are many factors going in. For example, productivity is calculated based on real GDP, which uses GDP deflator, while deflator for real wages that is typically used is CPI. Just the fact that you're using two different deflators already makes a meaningful comparison harder. Looking at minimum wage is not really relevant, as only around 2% of workers earn minimum wage. The degree cost explosion is very unfortunate, not only because it is more expensive now, but also because much fewer people had (or even attempted to obtain) degrees, so not only it was much cheaper for them, but also they simply didn't need to get them as much as people need them now. The push for universal tertiary education has been very detrimental to our society, as people need to spend more, and the only result is degree inflation.

epiphanitus 7y ago
Hey where can I read more about this? You got me curious...
- xyzzyz 7y ago
  Scott Alexander has a good entry level write-up[1]. He is not an economists, he tries to understand the debate as a lay-person, so it doesn't cover it all, but should give you some taste of the complexity involved. For an actual economist, see e.g. Scott Sumner[2]. [1] - https://slatestarcodex.com/2019/02/25/wage-stagnation-much-more-than-you-wanted-to-know/ https://slatestarcodex.com/2019/02/25/wage-stagnation-much-m... [2] - https://www.econlib.org/the-wage-decoupling-mess/ https://www.econlib.org/the-wage-decoupling-mess/
opportune 7y ago
Only about 2% of workers may earn minimum wage, but the minimum wage serves as a kind of anchor that other very-low pay jobs base their pay on. Many major national fast food chains (for example) pay like $8/hr which isn't technically minimum wage but is essentially the same, because if the minimum wage were $5/hr these jobs would probably similarly pay $6/hr or therabouts

oldjokes 7y ago

The really weird thing about wage stagnation is that there are millions of jobs going unfilled, companies are so desperate for people that they can't find anyone and are just dumping cash into stock buybacks instead of raising wages. Something is fundamentally broken in the labor market, it is not responding to supply & demand forces as it has in the past. I am not sure what terminology to use to describe what's going on now, but it's not a free labor market any more, it has been destroyed or transformed into some other construct.

SolaceQuantum 7y ago
IIRC Wages have been growing (modestly). [0] [0]https://www.vox.com/2019/5/3/18528010/april-2019-jobs-report-wages https://www.vox.com/2019/5/3/18528010/april-2019-jobs-report... (I know this isn't the best one, but I can't find the Reuters one that also states similarly)
Ancalagon 7y ago
Actually I would argue companies just don't want to pay the wages that Americans would expect for the labor. Raise the pay, you'll see those positions get more qualified candidates and then they will be filled.
- fma 7y ago
  Anecdote...I had a random chat with a hiring manager and he commented he can't hire the right developers. Developers think too highly of themselves and ask for too much money...I had no sympathy for him.
jjoonathan 7y ago
They don't need people. They always complain about needing people because it's always in their interest to do so, but the fact that they don't just raise wages strongly suggests that they don't know how to profitably employ additional people and that "we need people" is just a bunch of hot air. This dilemma, and many like it, vanish entirely if you stop paying attention to what people say and start paying attention to what they do.

akeck 7y ago

I found a pay stub from a temp agency from the early 90s. I was earning $7.50/h to stuff envelopes. $14.07 in 2019 dollars.

jraby3 7y ago

That’s widely quoted but turns out to be incorrect. https://twitter.com/jmhorp/status/1125468274995675138 https://twitter.com/jmhorp/status/1125468274995675138

xyzzyz 7y ago
This is interesting, and I started clicking through some of these threads, but Twitter is just such a terrible format for it that I soon gave up.
ranie93 7y ago
They claim "median personal income for ALL AGES us up 394.4% since 1977". However a quick check on FRED [0] tells me this figure is way off: 1977: $23,202 2016: $31,099 (2017 not available in the data) ~34% increase They said they had sources but I only see sources for the price of bread claim. Maybe they aren't looking at real wages? In which case the claim is very misleading. I also agree twitter's thread layout is hard to follow. [0]https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
- xyzzyz 7y ago
  Yes, they aren't looking at real wages, that's the whole point of the comment: they are comparing the inflation of bread price with the nominal growth of median personal income.