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Given that US inflation-corrected wages have stagnated since the early 1970s, this explanation is substantively accurate. Sources: https://www.pewresearch.org

Given that US inflation-corrected wages have stagnated since the early 1970s, this explanation is substantively accurate. Sources: https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/ https://fas.org/sgp/crs/misc/R45090.pdf https://fas.org/sgp/crs/misc/R45090.pdf

refurb 6y ago
Sure, but wages are only component of total compensation. You can't ignore everything else. Total compensation as a percentage of national income has remained pretty steady, which means productivity growth is being passed on to employees.[1] Not necessarily as wages thought. [1]https://www.nber.org/digest/oct08/w13953.html https://www.nber.org/digest/oct08/w13953.html
- spaetzleesser 6y ago
  "Total compensation as a percentage of national income has remained pretty steady, which means productivity growth is being passed on to employees.[1] Not necessarily as wages thought." Considering that wages is the main income of lower incomes this means that most growth has gone to higher incomes.
- bleepblorp 6y ago
  I haven't looked very closely at the NBER paper's methodology but the conclusion flies in the face of the raw data on total compensation as a share of GDP/GDI from the BEA[1] and other sources[2]. The NBER paper bases its conclusion on a suggestion that GDP figures are not accurately estimated; this seems like somewhat of a strange position but I am not qualified to evaluate it on merits. The raw data indicate that total compensation as a percentage of GDP/GDI has been falling since at least the early 1970s. These percentages are derived by comparing nominal dollar values within the same year (e.g. 2018 total compensation divided by 2018 GDP, both in 2018 nominal dollars). Unlike estimates of long-term real wages, these percentages are not dependent on inflation assumptions. The long term trend paints a clear picture that people who earn most of their income (including benefits) from wage labor have been losing ground economically for decades. Even without metrics, this conclusion is supported by living memory history. In 1970, a single middle-class full-time income could support a comfortable lifestyle for a family of four. In 2020, a single middle-class full time income can't support housing costs in most (possibly all?) urban centers. We're going backwards. [1] https://fred.stlouisfed.org/series/A4002E1A156NBEA https://fred.stlouisfed.org/series/A4002E1A156NBEA [2] https://fred.stlouisfed.org/series/LABSHPUSA156NRUG https://fred.stlouisfed.org/series/LABSHPUSA156NRUG
  - refurb 6y ago
    A single, middle class income can certainly support a family of four in the majority of the US. And back in 1970, could a single middle class income support a family of four in Manhattan? Urban centers have always been expensive.

refurb 6y ago

Sure, but wages are only component of total compensation. You can't ignore everything else. Total compensation as a percentage of national income has remained pretty steady, which means productivity growth is being passed on to employees.[1] Not necessarily as wages thought. [1]https://www.nber.org/digest/oct08/w13953.html https://www.nber.org/digest/oct08/w13953.html

spaetzleesser 6y ago
"Total compensation as a percentage of national income has remained pretty steady, which means productivity growth is being passed on to employees.[1] Not necessarily as wages thought." Considering that wages is the main income of lower incomes this means that most growth has gone to higher incomes.
bleepblorp 6y ago
I haven't looked very closely at the NBER paper's methodology but the conclusion flies in the face of the raw data on total compensation as a share of GDP/GDI from the BEA[1] and other sources[2]. The NBER paper bases its conclusion on a suggestion that GDP figures are not accurately estimated; this seems like somewhat of a strange position but I am not qualified to evaluate it on merits. The raw data indicate that total compensation as a percentage of GDP/GDI has been falling since at least the early 1970s. These percentages are derived by comparing nominal dollar values within the same year (e.g. 2018 total compensation divided by 2018 GDP, both in 2018 nominal dollars). Unlike estimates of long-term real wages, these percentages are not dependent on inflation assumptions. The long term trend paints a clear picture that people who earn most of their income (including benefits) from wage labor have been losing ground economically for decades. Even without metrics, this conclusion is supported by living memory history. In 1970, a single middle-class full-time income could support a comfortable lifestyle for a family of four. In 2020, a single middle-class full time income can't support housing costs in most (possibly all?) urban centers. We're going backwards. [1] https://fred.stlouisfed.org/series/A4002E1A156NBEA https://fred.stlouisfed.org/series/A4002E1A156NBEA [2] https://fred.stlouisfed.org/series/LABSHPUSA156NRUG https://fred.stlouisfed.org/series/LABSHPUSA156NRUG
- refurb 6y ago
  A single, middle class income can certainly support a family of four in the majority of the US. And back in 1970, could a single middle class income support a family of four in Manhattan? Urban centers have always been expensive.