4 ms·

> real earnings have declined precipitously since the sixties My recollection is that this is not true and that real wages have risen (although not by as much

> real earnings have declined precipitously since the sixties My recollection is that this is not true and that real wages have risen (although not by as much as one would hope) since the 60s. Do you have a source for this?

imtringued 5y ago
Real wages have risen on average. The question is for whom.
nimbius 5y ago
important to mention im still talking about blue-collar high school grads here, the ones driving current wage growth post-intra pandemic. these include paramedics and bartenders for perspective, who generally do not get healthcare or retirement benefits. https://sgp.fas.org/crs/misc/R45090.pdf https://sgp.fas.org/crs/misc/R45090.pdf
- dwohnitmok 5y ago
  On closer reading indeed the high school grads part seems to be suffering quite a bit. That decline seems to be something that would not wiped out by any increases since the 60s. But it's important to note that at this point only high school grads do not make up "most Americans." Whether that's good is another topic.
- dwohnitmok 5y ago
  Right, but your source here is from 1979 (I think there's a larger increase since the 60s) and it still displays an overall (small) rise in real wage growth for the 10th and 50th percentile. It displays a (small, which is still very bad to be clear, you would expect a large increase, but this isn't really "precipitous") drop in real wage growth for males in the 10th and 50th percentile. I don't have a source off the top of my head, but I think you'll find a rise in real wage growth for both males and females for both 10th and 50th percentile since the 60s.
phnofive 5y ago
The minimum wage (not directly the answer but a useful reference) hit its peak inflation-adjusted value in 1968, per the EPI: https://www.epi.org/publication/congress-has-never-let-the-federal-minimum-wage-erode-for-this-long/ https://www.epi.org/publication/congress-has-never-let-the-f...
- dwohnitmok 5y ago
  This is a good point. The federal minimum wage not rising is a good indicator that there are likely large sections of the U.S. with precipitous drops in real wages, in particular those places with no higher minimum wage than the federal minimum. But the overall minimum wage is the highest in history (adjusted for inflation): https://www.nytimes.com/2019/04/24/upshot/why-america-may-already-have-its-highest-minimum-wage.html https://www.nytimes.com/2019/04/24/upshot/why-america-may-al...
  - phnofive 5y ago
    'Effective minimum wage' is Ernie Tedeschi's hobbyhorse and has little to do with my point. I'd like to live in a world where minimum wage was irrelevant because business owners grow their companies efficiently and pay a salary that is fair according to universal consensus, but gig work tells us all we need to know about the effectiveness of a price floor for protecting those around the poverty level from completely devaluing low skill labor. Don't unions essentially exist for the same reason?
    - Ekaros 5y ago
      Interesting question really. Who should receive minimum wage? I would probably think of unskilled unskilled labour. That is only the labour starting in those unskilled positions. A few months should have already improved their productivity compared to peers just starting.
spaetzleesser 5y ago
I don’t think that they have shrunk but they grew only moderately. When you account for costs like house no, health care or education then they definitely have shrunk. When I grew up there were families in my neighborhood with the dad working as a loader in a warehouse, stay at home mine, three kids and a nice house. This isn’t possible today. Even if lower incomes have grown a little, upper incomes have grown way more making a lot of things way more expensive for people with lower income.
sxyuan 5y ago
Couldn't find data for the 60s and 70s, but FRED data shows that median real wages were essentially flat from 1979 to 2015ish: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q The picture gets worse if you look at men only: https://fred.stlouisfed.org/series/LES1252881900Q https://fred.stlouisfed.org/series/LES1252881900Q (The COVID spike should be ignored - low wage earners going unemployed skews the median.) Say what you will about gender equality, but societal expectations around men providing for the family still exist. This is also using a CPI adjustment that offsets steep increases in the price of necessities like housing, education, and healthcare with hedonic adjustments for higher quality cars, TVs, and phones. So the real picture is even worse than the data might suggest.
- dwohnitmok 5y ago
  > FRED data shows that median real wages were essentially flat from 1979 to 2015ish Yeah that makes sense. Precipitous drop in real wages since the 60s though is a pretty big claim that deserves quite a bit of scrutiny before just being accepted as brute fact. > offsets steep increases in the price of necessities like housing, education, and healthcare with hedonic adjustments for higher quality cars, TVs, and phones. Right but the offset is proportional to the monetary amount spent right (I also don't believe cars actually get a hedonic adjustment but I may be misremembering)? That is for steep increases in housing, education, and healthcare to be offset by hedonic adjustments in TVs and phones, roughly the same amount of money would be spent on housing, education, and healthcare, as on TVs and phones (or would need astronomically large hedonic adjustments). That being said housing, education, and healthcare have indeed seen steep inflation-adjusted increases in costs, but I interpret that to mean a widespread low rate of increase in costs for the rest of the basket, which includes clothing, food, and the like (which is not necessarily a good thing, it would probably be a good thing to say triple the price of electronics if that could result in healthcare costs staying stable).
  - sxyuan 5y ago
    Cars and trucks get a "cost based adjustment": https://www.bls.gov/cpi/quality-adjustment/ https://www.bls.gov/cpi/quality-adjustment/ According to this, hedonic adjustments and cost based adjustments are two ways that the US BLS performs quality adjustments for the CPI: [pdf] https://www.bls.gov/cpi/additional-resources/quality-adjustment-price-programs-presentation.pdf https://www.bls.gov/cpi/additional-resources/quality-adjustm... For a higher level view of how these adjustments may have impacted the CPI, along with changes within individual categories, this article presents a fairly balanced view: https://www.lynalden.com/inflation/#cpi https://www.lynalden.com/inflation/#cpi

imtringued 5y ago

Real wages have risen on average. The question is for whom.

nimbius 5y ago

important to mention im still talking about blue-collar high school grads here, the ones driving current wage growth post-intra pandemic. these include paramedics and bartenders for perspective, who generally do not get healthcare or retirement benefits. https://sgp.fas.org/crs/misc/R45090.pdf https://sgp.fas.org/crs/misc/R45090.pdf

dwohnitmok 5y ago
On closer reading indeed the high school grads part seems to be suffering quite a bit. That decline seems to be something that would not wiped out by any increases since the 60s. But it's important to note that at this point only high school grads do not make up "most Americans." Whether that's good is another topic.
dwohnitmok 5y ago
Right, but your source here is from 1979 (I think there's a larger increase since the 60s) and it still displays an overall (small) rise in real wage growth for the 10th and 50th percentile. It displays a (small, which is still very bad to be clear, you would expect a large increase, but this isn't really "precipitous") drop in real wage growth for males in the 10th and 50th percentile. I don't have a source off the top of my head, but I think you'll find a rise in real wage growth for both males and females for both 10th and 50th percentile since the 60s.

phnofive 5y ago

The minimum wage (not directly the answer but a useful reference) hit its peak inflation-adjusted value in 1968, per the EPI: https://www.epi.org/publication/congress-has-never-let-the-federal-minimum-wage-erode-for-this-long/ https://www.epi.org/publication/congress-has-never-let-the-f...

dwohnitmok 5y ago
This is a good point. The federal minimum wage not rising is a good indicator that there are likely large sections of the U.S. with precipitous drops in real wages, in particular those places with no higher minimum wage than the federal minimum. But the overall minimum wage is the highest in history (adjusted for inflation): https://www.nytimes.com/2019/04/24/upshot/why-america-may-already-have-its-highest-minimum-wage.html https://www.nytimes.com/2019/04/24/upshot/why-america-may-al...
- phnofive 5y ago
  'Effective minimum wage' is Ernie Tedeschi's hobbyhorse and has little to do with my point. I'd like to live in a world where minimum wage was irrelevant because business owners grow their companies efficiently and pay a salary that is fair according to universal consensus, but gig work tells us all we need to know about the effectiveness of a price floor for protecting those around the poverty level from completely devaluing low skill labor. Don't unions essentially exist for the same reason?
  - Ekaros 5y ago
    Interesting question really. Who should receive minimum wage? I would probably think of unskilled unskilled labour. That is only the labour starting in those unskilled positions. A few months should have already improved their productivity compared to peers just starting.

spaetzleesser 5y ago

I don’t think that they have shrunk but they grew only moderately. When you account for costs like house no, health care or education then they definitely have shrunk. When I grew up there were families in my neighborhood with the dad working as a loader in a warehouse, stay at home mine, three kids and a nice house. This isn’t possible today. Even if lower incomes have grown a little, upper incomes have grown way more making a lot of things way more expensive for people with lower income.

sxyuan 5y ago

Couldn't find data for the 60s and 70s, but FRED data shows that median real wages were essentially flat from 1979 to 2015ish: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q The picture gets worse if you look at men only: https://fred.stlouisfed.org/series/LES1252881900Q https://fred.stlouisfed.org/series/LES1252881900Q (The COVID spike should be ignored - low wage earners going unemployed skews the median.) Say what you will about gender equality, but societal expectations around men providing for the family still exist. This is also using a CPI adjustment that offsets steep increases in the price of necessities like housing, education, and healthcare with hedonic adjustments for higher quality cars, TVs, and phones. So the real picture is even worse than the data might suggest.

dwohnitmok 5y ago
> FRED data shows that median real wages were essentially flat from 1979 to 2015ish Yeah that makes sense. Precipitous drop in real wages since the 60s though is a pretty big claim that deserves quite a bit of scrutiny before just being accepted as brute fact. > offsets steep increases in the price of necessities like housing, education, and healthcare with hedonic adjustments for higher quality cars, TVs, and phones. Right but the offset is proportional to the monetary amount spent right (I also don't believe cars actually get a hedonic adjustment but I may be misremembering)? That is for steep increases in housing, education, and healthcare to be offset by hedonic adjustments in TVs and phones, roughly the same amount of money would be spent on housing, education, and healthcare, as on TVs and phones (or would need astronomically large hedonic adjustments). That being said housing, education, and healthcare have indeed seen steep inflation-adjusted increases in costs, but I interpret that to mean a widespread low rate of increase in costs for the rest of the basket, which includes clothing, food, and the like (which is not necessarily a good thing, it would probably be a good thing to say triple the price of electronics if that could result in healthcare costs staying stable).
- sxyuan 5y ago
  Cars and trucks get a "cost based adjustment": https://www.bls.gov/cpi/quality-adjustment/ https://www.bls.gov/cpi/quality-adjustment/ According to this, hedonic adjustments and cost based adjustments are two ways that the US BLS performs quality adjustments for the CPI: [pdf] https://www.bls.gov/cpi/additional-resources/quality-adjustment-price-programs-presentation.pdf https://www.bls.gov/cpi/additional-resources/quality-adjustm... For a higher level view of how these adjustments may have impacted the CPI, along with changes within individual categories, this article presents a fairly balanced view: https://www.lynalden.com/inflation/#cpi https://www.lynalden.com/inflation/#cpi