3 ms·

50% of Americans made less than $26,000 a year in 2010: http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2010 http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2010 Wages

50% of Americans made less than $26,000 a year in 2010: http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2010 http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2010 Wages have been stagnant since the 70s, while healthcare costs and cost of living have skyrocketed: http://www.washingtonpost.com/business/economy/higher-prices-stagnant-wages-chip-at-savings-rate/2011/11/23/gIQABV4rpN_story.html http://www.washingtonpost.com/business/economy/higher-prices... And, if Federal Reserve created inflation hadn't destroyed their purchasing power, they'd be 20% ahead on wages at the bottom than they are today even if those wages had stayed at the same literal dollar amount they were at over forty years ago. The middle class is getting hammered and because they have less disposable income they save less and spend less, hence the economy grows slower. Wages as a percent of the economy are basically the lowest ever: http://www.nytimes.com/2011/11/26/business/for-companies-the-good-old-days-are-now.html http://www.nytimes.com/2011/11/26/business/for-companies-the...

yummyfajitas 15y ago
Wages have been stagnant since the 70s, while healthcare costs and cost of living have skyrocketed This sentence is a jumble of confusion. Wages have not been "stagnant", wages adjusted for a flawed [1] measure of the cost of living have been. Nominal wages are way up. You are correct that health care costs increased, but those costs are mostly not paid for with wages [2]. In fact, total compensation for labor is up considerably. Workers simply receive more of their benefits in the form of untaxed health benefits rather than taxable wages: http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=1140 http://www.minneapolisfed.org/publications_papers/pub_displa... Further, the stagnation of wages themselves is due mainly to Simpson's Paradox. Immigrants enter the US and occupy low levels of the wage ladder, lowering the averages. But the immigrants are better off, as are non-immigrants (who's wages did not stagnate): http://crazybear.posterous.com/did-immigrants-and-simpsons-paradox-cause-the http://crazybear.posterous.com/did-immigrants-and-simpsons-p... [1] http://en.wikipedia.org/wiki/Boskin_Commission http://en.wikipedia.org/wiki/Boskin_Commission [2] Those health care costs are, however, used to adjust wages downwards via CPI.
- wisty 15y ago
  > In fact, total compensation for labor is up considerably Over 40 years, you'd hope for a little more than "considerably". Especially since a lot of growth is in worker productivity - people doing real work (i.e. those on minimum wage) work harder than ever.
  - yummyfajitas 15y ago
    Maybe 39% (from 1975-2005) isn't enough for you. That's your call. To me, it's a far cry from "stagnation". As for growth in worker productivity, I seriously doubt it occurred due to actions of minimum wage workers. Are you asserting that a burger flipper flips more burgers now than in 1975? If we follow Paul Krugman's logic [1], this is not the case. Workers tend to be paid their marginal product. This suggests that if wage gains were distributed more to the top than the bottom, this is because the productivity of high earners increased more than the productivity of low earners. [1] http://krugman.blogs.nytimes.com/2011/11/22/taxing-job-creators/ http://krugman.blogs.nytimes.com/2011/11/22/taxing-job-creat...
    - wisty 15y ago
      Wow, that's 1% growth per year. It should be closer to 2%.
  - tsotha 15y ago
    >Over 40 years, you'd hope for a little more than "considerably". No, actually, that's about the best you can hope for. It goes both directions, unfortunately.

yummyfajitas 15y ago

Wages have been stagnant since the 70s, while healthcare costs and cost of living have skyrocketed This sentence is a jumble of confusion. Wages have not been "stagnant", wages adjusted for a flawed [1] measure of the cost of living have been. Nominal wages are way up. You are correct that health care costs increased, but those costs are mostly not paid for with wages [2]. In fact, total compensation for labor is up considerably. Workers simply receive more of their benefits in the form of untaxed health benefits rather than taxable wages: http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=1140 http://www.minneapolisfed.org/publications_papers/pub_displa... Further, the stagnation of wages themselves is due mainly to Simpson's Paradox. Immigrants enter the US and occupy low levels of the wage ladder, lowering the averages. But the immigrants are better off, as are non-immigrants (who's wages did not stagnate): http://crazybear.posterous.com/did-immigrants-and-simpsons-paradox-cause-the http://crazybear.posterous.com/did-immigrants-and-simpsons-p... [1] http://en.wikipedia.org/wiki/Boskin_Commission http://en.wikipedia.org/wiki/Boskin_Commission [2] Those health care costs are, however, used to adjust wages downwards via CPI.

wisty 15y ago
> In fact, total compensation for labor is up considerably Over 40 years, you'd hope for a little more than "considerably". Especially since a lot of growth is in worker productivity - people doing real work (i.e. those on minimum wage) work harder than ever.
- yummyfajitas 15y ago
  Maybe 39% (from 1975-2005) isn't enough for you. That's your call. To me, it's a far cry from "stagnation". As for growth in worker productivity, I seriously doubt it occurred due to actions of minimum wage workers. Are you asserting that a burger flipper flips more burgers now than in 1975? If we follow Paul Krugman's logic [1], this is not the case. Workers tend to be paid their marginal product. This suggests that if wage gains were distributed more to the top than the bottom, this is because the productivity of high earners increased more than the productivity of low earners. [1] http://krugman.blogs.nytimes.com/2011/11/22/taxing-job-creators/ http://krugman.blogs.nytimes.com/2011/11/22/taxing-job-creat...
  - wisty 15y ago
    Wow, that's 1% growth per year. It should be closer to 2%.
- tsotha 15y ago
  >Over 40 years, you'd hope for a little more than "considerably". No, actually, that's about the best you can hope for. It goes both directions, unfortunately.