7 ms·

https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE Looks like we're at nearly an all-time low for the last 25 years as well, n

https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE Looks like we're at nearly an all-time low for the last 25 years as well, no?

thorwasdfasdf 7y ago
You're right. But, wages haven't improved in the last 40 years for the average person, especially if you compare it to a basket of goods containing the essentials: housing, transportation, medical insurance and education.
- akhilcacharya 7y ago
  This feels like a goalpost move to me
- icebraining 7y ago
  That basket hasn't stayed still, though. Houses are bigger, cars are better, medical procedures are more effective, etc. How much would I have to pay you to convince you to use the average 1979 versions of all of those?
  - maxerickson 7y ago
    Most people probably already live in places that are older than 40 years. And there's no automatic reason that doctors and manufacturers should have captured the increased value of their procedures and products.
  - mdorazio 7y ago
    There's a faulty assumption baked into your comment that most Americans are actually buying/using new things. My apartment building was built in the 1970s, I would happily drive a 1970s muscle car if I could find one at a reasonable price, and in the 1970s you could actually see a doctor without worrying about going bankrupt. Also in the 1970s the building and car would have been new, so I would probably pay you to give me those things today.
    - icebraining 7y ago
      > My apartment building was built in the 1970s Yeah, but in the 70s you'd probably be living in an apartment built in the 1930s. The ones actually built in the 70s were a small minority back then, just like the ones built in the 2010s are a minority today.
      - mdorazio 7y ago
        I don't think that's true. Remember that there was a massive post-war boom in population and construction starting in the 50s and extending for several decades until the land got used up in cities. Chances are if you were old enough to rent an apartment or buy a house in the 70s, it was built within the last 20 years.
  - novok 7y ago
    A lot of us live in significantly higher priced 1979 or older housing, which is way more expensive as a percentage of average income as far as monthly payment goes compared to back then. Similarly with cars, they still got you from a to b in a good enough fashion. It’s the 80/20 rule, and many people would buy 1979 level items if they were available at 1979 prices.
  - adventured 7y ago
    It also ignores the extreme improvement in the US social safety net since the late 1960s, which is generally ignored in such discussions. That has improved the lives of the bottom 1/3 by a lot, which is not captured at all in the wage growth figures. As one example, it has led to a very large improvement in childhood poverty rates (about a 50% reduction in childhood poverty since the early 1990s): https://i.imgur.com/OrMwlkT.png https://i.imgur.com/OrMwlkT.png You can also see that wage growth by the bottom half has soared (up four fold since mid 2013), and is now well outpacing wage growth by the top half: https://i.imgur.com/Mi6mgme.png https://i.imgur.com/Mi6mgme.png
    - refurb 7y ago
      Not sure why this is being downvoted. Provided sources and all. Seems like a reasonable comment to me.
  - jefurii 7y ago
    I'd love to be able to buy the house my parents bought in the mid-1970s for $35K, it'd be a step up from where I'm at now. It be a good thing if affordable and practical cars like my dad's VW Beetle were more common. And you know, I'd love it if our society had the kind of access to healthcare that we had back in the 1970s. Even in the late 1980s it was possible to graduate from a state college with only a few thousand dollars of debt. You wouldn't have to pay me to live like that. Though I wouldn't want to go back to the kind of energy infrastructure we had back then.
    - tropo 7y ago
      We made it all illegal, ignoring the fact that not all Americans can afford the fancy stuff. Maybe there was even offense taken that some people would have less-fancy things. So now our typical building code says you have to pay for copper wires instead of aluminum, you need arc-fault interrupters instead of circuit breakers or simple fuses, you need wired-in alarms in every room, an air conditioner must be installed, balloon construction is prohibited, walls need internal cross bracing, studs must be close together, and on an on. If you can't afford all that, evidently you aren't supposed to have a home. Likewise, producing the original VW Beetle and selling it would be illegal. You have to have a zillion air bags, all very expensive. You have to have a camera and a screen. You have to have ABS or even traction control. You have to have a catalytic converter. You have to have more than one brake light. The turn signals must be lights. If you can't afford all that, evidently you don't belong on the road.
- YinglingLight 7y ago
  Purchasing power has stayed stable. Tuition has skyrocketed, medical care cost has increased http://www.mybudget360.com/is-college-worth-it-college-education-cost-student-debt-inflation/ http://www.mybudget360.com/is-college-worth-it-college-educa..., but technology, apparel, food, and new vehicles have decreased in cost.
- airstrike 7y ago
  > But, wages haven't improved in the last 40 years for the average person ...in the US. Growing inequality in the US is driven by the fact that capital gains domestically have improved dramatically alongside wage gains abroad, while wage has been essentially stagnant within the US due to globalization / offshoring / outsourcing The solution, in my humble immigrant opinion, is to train Americans to take on service jobs that cannot be easily automated / performed by cheap labor overseas. But that requires taking an honest look at the country's education system and neither side of the aisle seems to be able to do that without resorting to anger and vitriol
  - shims 7y ago
    > The solution, in my humble immigrant opinion, is to train Americans to take on service jobs that cannot be easily automated / performed by cheap labor overseas. It would also require software developers to take an honest look at our industry.
  - supahfly_remix 7y ago
    > The solution, in my humble immigrant opinion, is to train Americans to take on service jobs that cannot be easily automated / performed by cheap labor overseas. What kind of jobs are these?
    - beamatronic 7y ago
      Trade jobs. Welder, carpenter, plumber, etc.
      - jjoonathan 7y ago
        Do you have reason to think the trades have enough aggregate demand to soak up the entire underemployed population at reasonable wages or is that wishful thinking?
        fuzz4lyfe 7y ago
        Another question is if this underemployed population could see such great gains by moving to these fields why haven't they already? It may be that they aren't capable of doing these jobs.
- rayiner 7y ago
  Looking at wages is misleading. Total compensation, including benefits, has been going up consistently. Labor’s share of national income has also been pretty consistent. What’s been happening is that the increasing costs of benefits have been wiping out gains in wages. But that’s not a problem with “the economy” as a whole. From the perspective of employers, it makes no difference if an employee costs $1,000 per year because they get a raise or because the cost of health insurance went up. Now, if education and healthcare is eating up all the gains, that might be a reason to reform those sectors. But there is a big difference between compensation going up but prices increasing quickly in particularly important sectors, and compensation not going up at all. The former is a problem with those sectors. The latter would indicate a structural problem with the economy.
  - salawat 7y ago
    I don't think one can honestly look at employers paying employee's health insurance premium and honestly count that as compensation to the person per se. It's more of a capital expenditure bound to the position in need of being filled by a warm body. That insurance, in short, is not yours. It is your employer's investment in keeping the occupant of that position a healthy working cog/gear. You just happen to be filling it at the moment. I really wish we as a society would do a better job at framing these arrangements correctly. You (the employee) never have control of any capital with which to shop around for the best deal. Your employer does. Framing it as belonging to the employee just distorts the picture of what is going where to the point that we can't really say what we're measuring down the road.
    - airstrike 7y ago
      > You (the employee) never have control of any capital with which to shop around for the best deal. You can always choose which career you want to pursue, at least in theory...
    - rayiner 7y ago
      That makes no sense. If your employer paid your rent, would that not be compensation to you? After all, you need housing even more than you need health care. Sure, there’s ancillary benefits to the employer from paying your health insurance. But that’s true of your salary as well. Your salary also makes sure you keep showing up for work. From the employer’s perspective it makes no difference. Health insurance premiums spent on you don’t result in a durable capital asset the employer can then use or sell. The only reason employers pay $1,000 in premiums versus $1,000 in salary is that it’s more tax advantaged for the employer (and, now, the ACA makes them do it). The “distortion” comes from excluding benefits from compensation. It makes it impossible to determine what you’re actually measuring—the share of total income going to employees, or rising costs in one particular sector (that the employer has nothing to do with).
- refurb 7y ago
  Real (inflation adjust) non-farm compensation (not just wages) has increased by 43% since 1980.[1] Now, truth be told that a lot of that compensation is just increasing health insurance premiums paid for by employers, but it's inaccurate to say compensation hasn't increased. [1]https://fred.stlouisfed.org/graph/?id=COMPRNFB https://fred.stlouisfed.org/graph/?id=COMPRNFB,
  - MaysonL 7y ago
    Of course, if you look at median income, almost all of that increase came 1980-2000: https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
  - michaelt 7y ago
    If in 1980 my employer would cover the $30 cost of a doctor's consultation, and today they'll cover the $150 cost of exactly the same consultation, am I better compensated? Some would say receiving the same thing is not an increase, even if the sticker price is higher.
    - gdubs 7y ago
      Came here to say this. It’s unclear that medical care has improved for people as the costs have gone up. If they’ve only gotten more expensive, then in a basket-of-goods analysis, earning power has decreased. Edit: Just to be clear, obviously techniques and procedures get ever more sophisticated. The question is more specifically whether the average person is seeing an improvement in care that is proportional to the increase in costs. E.g., if office appointment costs have doubled for someone over the past ten years, have they seen a double or greater increase in effectiveness of care? Or is it just more expensive.
      - ameister14 7y ago
        Well, age adjusted mortality has gone down by about 1/3 since 1980 and mortality rate for cancer is down about 21%
    - 7y ago
- RickJWagner 7y ago
  I think we have different baskets today, though. For instance, a 40 year old basket wouldn't have a cell phone or service. (This is a phone, entertainment, takes the place of a set of encyclopedias and maps, a flashlight, camera, etc.) Most families have several of these today.

https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE Looks like we're at nearly an all-time low for the last 25 years as well, no?

thorwasdfasdf 7y ago

You're right. But, wages haven't improved in the last 40 years for the average person, especially if you compare it to a basket of goods containing the essentials: housing, transportation, medical insurance and education.

akhilcacharya 7y ago
This feels like a goalpost move to me
icebraining 7y ago
That basket hasn't stayed still, though. Houses are bigger, cars are better, medical procedures are more effective, etc. How much would I have to pay you to convince you to use the average 1979 versions of all of those?
- maxerickson 7y ago
  Most people probably already live in places that are older than 40 years. And there's no automatic reason that doctors and manufacturers should have captured the increased value of their procedures and products.
- mdorazio 7y ago
  There's a faulty assumption baked into your comment that most Americans are actually buying/using new things. My apartment building was built in the 1970s, I would happily drive a 1970s muscle car if I could find one at a reasonable price, and in the 1970s you could actually see a doctor without worrying about going bankrupt. Also in the 1970s the building and car would have been new, so I would probably pay you to give me those things today.
  - icebraining 7y ago
    > My apartment building was built in the 1970s Yeah, but in the 70s you'd probably be living in an apartment built in the 1930s. The ones actually built in the 70s were a small minority back then, just like the ones built in the 2010s are a minority today.
    - mdorazio 7y ago
      I don't think that's true. Remember that there was a massive post-war boom in population and construction starting in the 50s and extending for several decades until the land got used up in cities. Chances are if you were old enough to rent an apartment or buy a house in the 70s, it was built within the last 20 years.
- novok 7y ago
  A lot of us live in significantly higher priced 1979 or older housing, which is way more expensive as a percentage of average income as far as monthly payment goes compared to back then. Similarly with cars, they still got you from a to b in a good enough fashion. It’s the 80/20 rule, and many people would buy 1979 level items if they were available at 1979 prices.
- adventured 7y ago
  It also ignores the extreme improvement in the US social safety net since the late 1960s, which is generally ignored in such discussions. That has improved the lives of the bottom 1/3 by a lot, which is not captured at all in the wage growth figures. As one example, it has led to a very large improvement in childhood poverty rates (about a 50% reduction in childhood poverty since the early 1990s): https://i.imgur.com/OrMwlkT.png https://i.imgur.com/OrMwlkT.png You can also see that wage growth by the bottom half has soared (up four fold since mid 2013), and is now well outpacing wage growth by the top half: https://i.imgur.com/Mi6mgme.png https://i.imgur.com/Mi6mgme.png
  - refurb 7y ago
    Not sure why this is being downvoted. Provided sources and all. Seems like a reasonable comment to me.
- jefurii 7y ago
  I'd love to be able to buy the house my parents bought in the mid-1970s for $35K, it'd be a step up from where I'm at now. It be a good thing if affordable and practical cars like my dad's VW Beetle were more common. And you know, I'd love it if our society had the kind of access to healthcare that we had back in the 1970s. Even in the late 1980s it was possible to graduate from a state college with only a few thousand dollars of debt. You wouldn't have to pay me to live like that. Though I wouldn't want to go back to the kind of energy infrastructure we had back then.
  - tropo 7y ago
    We made it all illegal, ignoring the fact that not all Americans can afford the fancy stuff. Maybe there was even offense taken that some people would have less-fancy things. So now our typical building code says you have to pay for copper wires instead of aluminum, you need arc-fault interrupters instead of circuit breakers or simple fuses, you need wired-in alarms in every room, an air conditioner must be installed, balloon construction is prohibited, walls need internal cross bracing, studs must be close together, and on an on. If you can't afford all that, evidently you aren't supposed to have a home. Likewise, producing the original VW Beetle and selling it would be illegal. You have to have a zillion air bags, all very expensive. You have to have a camera and a screen. You have to have ABS or even traction control. You have to have a catalytic converter. You have to have more than one brake light. The turn signals must be lights. If you can't afford all that, evidently you don't belong on the road.
YinglingLight 7y ago
Purchasing power has stayed stable. Tuition has skyrocketed, medical care cost has increased http://www.mybudget360.com/is-college-worth-it-college-education-cost-student-debt-inflation/ http://www.mybudget360.com/is-college-worth-it-college-educa..., but technology, apparel, food, and new vehicles have decreased in cost.
airstrike 7y ago
> But, wages haven't improved in the last 40 years for the average person ...in the US. Growing inequality in the US is driven by the fact that capital gains domestically have improved dramatically alongside wage gains abroad, while wage has been essentially stagnant within the US due to globalization / offshoring / outsourcing The solution, in my humble immigrant opinion, is to train Americans to take on service jobs that cannot be easily automated / performed by cheap labor overseas. But that requires taking an honest look at the country's education system and neither side of the aisle seems to be able to do that without resorting to anger and vitriol
- shims 7y ago
  > The solution, in my humble immigrant opinion, is to train Americans to take on service jobs that cannot be easily automated / performed by cheap labor overseas. It would also require software developers to take an honest look at our industry.
- supahfly_remix 7y ago
  > The solution, in my humble immigrant opinion, is to train Americans to take on service jobs that cannot be easily automated / performed by cheap labor overseas. What kind of jobs are these?
  - beamatronic 7y ago
    Trade jobs. Welder, carpenter, plumber, etc.
    - jjoonathan 7y ago
      Do you have reason to think the trades have enough aggregate demand to soak up the entire underemployed population at reasonable wages or is that wishful thinking?
      - fuzz4lyfe 7y ago
        Another question is if this underemployed population could see such great gains by moving to these fields why haven't they already? It may be that they aren't capable of doing these jobs.
rayiner 7y ago
Looking at wages is misleading. Total compensation, including benefits, has been going up consistently. Labor’s share of national income has also been pretty consistent. What’s been happening is that the increasing costs of benefits have been wiping out gains in wages. But that’s not a problem with “the economy” as a whole. From the perspective of employers, it makes no difference if an employee costs $1,000 per year because they get a raise or because the cost of health insurance went up. Now, if education and healthcare is eating up all the gains, that might be a reason to reform those sectors. But there is a big difference between compensation going up but prices increasing quickly in particularly important sectors, and compensation not going up at all. The former is a problem with those sectors. The latter would indicate a structural problem with the economy.
- salawat 7y ago
  I don't think one can honestly look at employers paying employee's health insurance premium and honestly count that as compensation to the person per se. It's more of a capital expenditure bound to the position in need of being filled by a warm body. That insurance, in short, is not yours. It is your employer's investment in keeping the occupant of that position a healthy working cog/gear. You just happen to be filling it at the moment. I really wish we as a society would do a better job at framing these arrangements correctly. You (the employee) never have control of any capital with which to shop around for the best deal. Your employer does. Framing it as belonging to the employee just distorts the picture of what is going where to the point that we can't really say what we're measuring down the road.
  - airstrike 7y ago
    > You (the employee) never have control of any capital with which to shop around for the best deal. You can always choose which career you want to pursue, at least in theory...
  - rayiner 7y ago
    That makes no sense. If your employer paid your rent, would that not be compensation to you? After all, you need housing even more than you need health care. Sure, there’s ancillary benefits to the employer from paying your health insurance. But that’s true of your salary as well. Your salary also makes sure you keep showing up for work. From the employer’s perspective it makes no difference. Health insurance premiums spent on you don’t result in a durable capital asset the employer can then use or sell. The only reason employers pay $1,000 in premiums versus $1,000 in salary is that it’s more tax advantaged for the employer (and, now, the ACA makes them do it). The “distortion” comes from excluding benefits from compensation. It makes it impossible to determine what you’re actually measuring—the share of total income going to employees, or rising costs in one particular sector (that the employer has nothing to do with).
refurb 7y ago
Real (inflation adjust) non-farm compensation (not just wages) has increased by 43% since 1980.[1] Now, truth be told that a lot of that compensation is just increasing health insurance premiums paid for by employers, but it's inaccurate to say compensation hasn't increased. [1]https://fred.stlouisfed.org/graph/?id=COMPRNFB https://fred.stlouisfed.org/graph/?id=COMPRNFB,
- MaysonL 7y ago
  Of course, if you look at median income, almost all of that increase came 1980-2000: https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
- michaelt 7y ago
  If in 1980 my employer would cover the $30 cost of a doctor's consultation, and today they'll cover the $150 cost of exactly the same consultation, am I better compensated? Some would say receiving the same thing is not an increase, even if the sticker price is higher.
  - gdubs 7y ago
    Came here to say this. It’s unclear that medical care has improved for people as the costs have gone up. If they’ve only gotten more expensive, then in a basket-of-goods analysis, earning power has decreased. Edit: Just to be clear, obviously techniques and procedures get ever more sophisticated. The question is more specifically whether the average person is seeing an improvement in care that is proportional to the increase in costs. E.g., if office appointment costs have doubled for someone over the past ten years, have they seen a double or greater increase in effectiveness of care? Or is it just more expensive.
    - ameister14 7y ago
      Well, age adjusted mortality has gone down by about 1/3 since 1980 and mortality rate for cancer is down about 21%
  - 7y ago
RickJWagner 7y ago
I think we have different baskets today, though. For instance, a 40 year old basket wouldn't have a cell phone or service. (This is a phone, entertainment, takes the place of a set of encyclopedias and maps, a flashlight, camera, etc.) Most families have several of these today.