3 ms·

People like to blame Reagan but the separation between GDP and worker compensation happens around 1971. I'm sure it's just a coincidence this happened at the s

People like to blame Reagan but the separation between GDP and worker compensation happens around 1971. I'm sure it's just a coincidence this happened at the same time. https://en.wikipedia.org/wiki/Smithsonian_Agreement https://en.wikipedia.org/wiki/Smithsonian_Agreement

cma 3y ago
Women heavily started entering the workforce around then increasing the labor pool (increased supply of labor, downwards pressure on wages.
- inetknght 3y ago
  > downwards pressure on wages I would believe that if it weren't for the fact that top-level pay has significantly widened from the bottom-level pay.
  - ToValueFunfetti 3y ago
    I don't know whether the claim is true, but I think this effect supports it. Women are underrepresented at the top, so you'd expect the wage pressure to be lower there.
  - nemo44x 3y ago
    There’s also many more people (in percentage terms and actual) that are making top level pay. The upper middle class has expanded greatly. Once the domain of lawyers, doctors, and execs, the upper middle class has been opened to a wider range of professionals. 50 years ago this class of people was <5% of people. Today it approaches 30%. The lower class has also shrunk. So this has come at an expense to the middle class. It isn’t that the middle class is poorer but rather are closer to the lower class than upper middle. Before the middle class was much larger and more people were similar and people compared themselves that way. This is why housing in some markets seems insane to people in other markets. And why middle class people are locked out when living in an upper middle area.
- Retric 3y ago
  Changes to the workforce size don’t correlate well with the downward wage pressure. Similarly female participation in the workforce don’t line up well with wage stagnation. https://www.investors.com/wp-content/uploads/2020/02/wLFPrate021320.jpg https://www.investors.com/wp-content/uploads/2020/02/wLFPrat...
  - golemiprague 3y ago
    [dead]
  - cma 3y ago
    https://imageio.forbes.com/blogs-images/timworstall/files/2016/10/wagescompensation-1200x1093.jpg?height=647&width=711&fit=bounds https://imageio.forbes.com/blogs-images/timworstall/files/20... Lines up well at parts. It isn't the full explanation.
    - Retric 3y ago
      As often as people say correlation isn’t causation, non correlated trends that happen to overlap for a few datapoints is happenstance.
      - cma 3y ago
        Here's one with more breakdown for prime age workers by gender etc.: https://aneconomicsense.org/2016/10/14/the-structural-factors-behind-the-steady-fall-in-labor-force-participation-rates-of-prime-age-workers/ https://aneconomicsense.org/2016/10/14/the-structural-factor...
Lammy 3y ago
Try 1971's “An Interim Report to the President and the Congress from the Commission on Population Growth and the American Future”, chaired by John D. Rockefeller Ⅲ https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 (copy and paste to avoid HTTP Referer check)
HideousKojima 3y ago
Related to your link is also the Bretton Woods II agreement which got us off the gold standard completely.
josu 3y ago
Many indicators started diverging in 1971: https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/

cma 3y ago

Women heavily started entering the workforce around then increasing the labor pool (increased supply of labor, downwards pressure on wages.

inetknght 3y ago
> downwards pressure on wages I would believe that if it weren't for the fact that top-level pay has significantly widened from the bottom-level pay.
- ToValueFunfetti 3y ago
  I don't know whether the claim is true, but I think this effect supports it. Women are underrepresented at the top, so you'd expect the wage pressure to be lower there.
- nemo44x 3y ago
  There’s also many more people (in percentage terms and actual) that are making top level pay. The upper middle class has expanded greatly. Once the domain of lawyers, doctors, and execs, the upper middle class has been opened to a wider range of professionals. 50 years ago this class of people was <5% of people. Today it approaches 30%. The lower class has also shrunk. So this has come at an expense to the middle class. It isn’t that the middle class is poorer but rather are closer to the lower class than upper middle. Before the middle class was much larger and more people were similar and people compared themselves that way. This is why housing in some markets seems insane to people in other markets. And why middle class people are locked out when living in an upper middle area.
Retric 3y ago
Changes to the workforce size don’t correlate well with the downward wage pressure. Similarly female participation in the workforce don’t line up well with wage stagnation. https://www.investors.com/wp-content/uploads/2020/02/wLFPrate021320.jpg https://www.investors.com/wp-content/uploads/2020/02/wLFPrat...
- golemiprague 3y ago
  [dead]
- cma 3y ago
  https://imageio.forbes.com/blogs-images/timworstall/files/2016/10/wagescompensation-1200x1093.jpg?height=647&width=711&fit=bounds https://imageio.forbes.com/blogs-images/timworstall/files/20... Lines up well at parts. It isn't the full explanation.
  - Retric 3y ago
    As often as people say correlation isn’t causation, non correlated trends that happen to overlap for a few datapoints is happenstance.
    - cma 3y ago
      Here's one with more breakdown for prime age workers by gender etc.: https://aneconomicsense.org/2016/10/14/the-structural-factors-behind-the-steady-fall-in-labor-force-participation-rates-of-prime-age-workers/ https://aneconomicsense.org/2016/10/14/the-structural-factor...

Lammy 3y ago

Try 1971's “An Interim Report to the President and the Congress from the Commission on Population Growth and the American Future”, chaired by John D. Rockefeller Ⅲ https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 (copy and paste to avoid HTTP Referer check)

HideousKojima 3y ago

Related to your link is also the Bretton Woods II agreement which got us off the gold standard completely.

josu 3y ago

Many indicators started diverging in 1971: https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/