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Median Wages Have PLUMMETED Since 1969

George Washington's picture




 

Wages need to rise to keep up with inflation, especially since the value of the dollar has been trashed:

Dollar from 1913.gif Median Wages Have PLUMMETED Since 1969

But Michael Greenstone and Adam Looney of the Hamilton Project  document (hat tip Ezra Klein) that real median earnings for men declined between 1969 and 2009:

hamilton1 Median Wages Have PLUMMETED Since 1969

And wages have only kept dropping since 2009.

In addition – when those who have only part-time work are taken into account – we have depression-level unemployment.

As Klein notes:

When you take all men, not just those working fulltime, into account, the slight decline in the above graph becomes a plummet of 28 percent in median real wages from 1969 to 2009.

hamilton2 Median Wages Have PLUMMETED Since 1969

The bottom line is that – due to idiotic government policy – most of the jobs being created are part-time and low wage jobs.

 

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Thu, 08/09/2012 - 04:35 | 2690250 ebworthen
ebworthen's picture

All part of the plan of the Kleptoligarchy.

Of course, people without enough money or work are often eager to redress grievances.

Thu, 08/09/2012 - 08:50 | 2690527 covert
covert's picture

people vote themselves into poverty then blame it onto others.

http://expose2.wordpress.com/2011/11/20/a-voice-from-the-dark/

 

Thu, 08/09/2012 - 04:18 | 2690240 Nachdenken
Nachdenken's picture

Notes:  Table 1  Federal Reserve Note had its highest value during the depression / 1933

             Table 2 and 3 :  Median wages fell since the Vietnam War ended.

This latter wage fall corresponds, perhaps corelates, with growth in the Chinese economy.  Those and other marginal wage earners have preserved our standard of living. 

Thu, 08/09/2012 - 03:14 | 2690205 boiltherich
boiltherich's picture

In 69 my dad was a bartender and his wife was a half time receptionist at a doctors office. She had three kids and he had three kids, we all went to private school. We had a house three doors away from the Pacific on the last town before you left California for Oregon. She drove a new Pontiac, he had a 4 year old Corvair. Between them they made a little over $10k a year and we were solidly middle class. Mind you a full-time person making minimum wage then earned $2,200. The dentist down the block made $20k. A rich guy had a million or two. There were none of thouse in our county.

Here is an odd thing, I just looked up the minimum wage history and it says in 1968 min was $1.40. But I distinctly remember when it went from $1.25 to $1.50 and my boss said they had to cut my hours from 30 to 20 per week because of it, that was 1974. I remember it taking an entire paycheck to put retread tires on my car.

Sometimes the lottery is useful, to help people understand how money works, and how hype works. Today I bought a $2 single chance in the Powerball, the advertised jackpot is $212 million. Wow, for $2 I get a shot at 212 million bucks. And we have all heard about hillbilly types or NASCAR fans that won millions in the lottery and were in bankruptcy court two years later. I met one once, a guy I picked up at a bar because he was so wasted he could not fend for himself, he just won $7 million in the lottery and I doubt he lived to collect the second check he was so wasted.

The thing is that when they say the jackpot is $212 million that is the payout over 26 years at 8.15 million per year, but they have invested the real sum of 142 million to get that payout by buying bonds. And they are limited to buying only participating state and federal bonds yielding next to nothing. They can't go long the euro or short the S&P or anything else. And people argue over the wisdom of taking a lump sum over long-term payouts. This kind of gets to the heart of investing in general. If they can invest that 142 million in bonds to yield 212 million so can you. If you believe that the economy will only get sounder over the years and taxes go down and you will live more than 26 years then please take the long payout because it is like investing with a brokerage with no fees which can't go broke because of algos or ponzi issues.

If you are like me, mid fifties, I am not so sure about payouts over 26 years. Also, I could almost throw a dart at a board with investments posted on it and come up with better yield than bonds. And taxes are never going to be lower than they are now because they are too low, especially on top incomes. Pay 33% this year rather than 55% in ten years, or 75% in 20, don't think it can happen? France is levying a 75% tax on higher earners as of 2013. The taxpayers are fleeing but where can they go? No matter where they go the taxes will also get raised. But, if you pay all the taxes up front in this year what remains is never taxed again. Take the lump sum.

But the headlines about the hillbilly guys in bankruptcy, they never understood that they did not win 100 million or whatever, they hit the six numbers and thought ye hah, I have $100,000,000.00 when they really only had 25 million lump sum after taxes. That is why so many ended up bankrupt. And I am saying that the same thing is happening on a far larger scale with pensions and nations. Consumers even. Credit itself destroys real price discovery. And it is ironic because all progress, all major infrastructure and the very lifeblood of human civilization is credit, yet credit wipes out the one thing it relies upon, even as it makes the issuers of credit very welathy without doing any work.

We are in a bad position, we are at least five times the number of people that is the natural carrying capacity of the earth, and yet we cannot turn back, for every one of you that says when you are in a hole stop digging I say the problem is not debt and fiat as much as it is breeding ourselves to death. You can't hope to have a stable economy in real PM money without a stable population. Population inflation is equal to targeted monetary inflation, it does not work. And breeders do what breeders do, they fuck and make more breeders. Too bad. So, really there is no hope beyond the immediate horizon, things will just get worse and worse till there is no life on this planet at all. LTRO's, TPTB, bailouts and fiat and real money and Ron Paul, it's all bullshit and squabbling in the end days.

Drink a bottle of wine, eat a good meal while you can. Stop worrying about 2013, or 14 or 2020, or who is president or what the ECB does, or that tacky pants suit Merkel is wearing, or how to invest or how to survive, because you ain't going to survive life anyway. I promise you that you will be happier if you stop worrying about who the next door neighbor sleeps with or if Mr. Magic Underpants is going to win the election so you can pay lower taxes that are really higher taxes by inflation in the end.

Thu, 08/09/2012 - 02:48 | 2690188 Walt D.
Walt D.'s picture

Get used to it - this is as good as it gets. It's all downhill from here.

Thu, 08/09/2012 - 02:36 | 2690181 fijisailor
fijisailor's picture

I remember clearly when a good computer game program writer could make $100k right out of college in 1982. 

Wed, 08/08/2012 - 23:45 | 2689999 FieldingMellish
FieldingMellish's picture

THE MEASURE OF A MAN Author: Anonymous Not - How did he die? But - How did he live?
Not - What did he gain? But - What did he give?

These are the things that measure the worth
Of a man as a man, regardless of birth.

Not - What was his station? But - had he a heart?
And - How did he play his God-given part?

Was he ever ready with a word of good cheer?
To bring back a smile, to banish a tear?

Not - What was his church? Not - What was his creed?
But - Had he befriended those really in need?

Not - What did the sketch in the newspaper say?
But - How many were sorry when he passed away?

These are the things that measure the worth
Of a man as a man, regardless of birth.

Wed, 08/08/2012 - 22:48 | 2689850 working class dog
working class dog's picture

Women work because the Fed Reserve Bankers say you have too!

Wed, 08/08/2012 - 21:29 | 2689638 dolph9
dolph9's picture

Yeah, but you are supposed to be happy with iPads and Cheetos and computer generated Hollywood films.

 

Wages, who needs wages.

Wed, 08/08/2012 - 21:04 | 2689573 tony bonn
tony bonn's picture

it's not just the politicians who have brought about wage destruction - it includes the plutocrats, intellectuals, and professors.....and it is by design.

the average numbers are absolutely deplorable when you remove the income of the 1%....

Wed, 08/08/2012 - 19:27 | 2689380 flacorps
flacorps's picture

Developed nations will hyperinflate.

Developing nations will starve.

The four horsemen will ride out again, as usual.

In the aftermath there will be fewer people. And perhaps "A World Made by Hand" ... but this time I suspect there will be some far-flung enclave in the world somewhere where the mega-wealthy will flock to avoid the messiness ... and some angry folks might just get wind of it and make their way there with retribution in mind.

It would make a good plot for a potboiler novel.

Wed, 08/08/2012 - 21:08 | 2689583 Psyman
Psyman's picture

New Zealand is obviously the bug out location for the British elite, especially the Royal Family.  Look at its geographic location, lack of nuclear power, and relative lack of armaments generally.  If it all goes tits up this is where the Anglo elites will flee.  Not a bad idea for the common man to head down there right now either.  It's the last relatively free Anglo nation.  NZ is simply too small and under too little threat to justify building a massive police state as has been done in all other Anglo nations.

 

See, the Kiwis aren't afraid so their government can't use that fear to justify enslaving them in a police state.

 

As for the American elites, well the Bush family's 100,000 acre Paraguay ranch is well known.  Many of them also have bug out locations in the Southern Hemisphere that won't put them under the control of the British Royal family like bugging out to NZ would.

Wed, 08/08/2012 - 23:12 | 2689918 Aussiekiwi
Aussiekiwi's picture

Have a look at the footage of the FBI orchestrated arrest in NZ of the Megaupload founder before you get too carried away with NZ's not being manipulated by fear, a massive overkill, they could have just wandered up and knocked on his door instead of the dozen heavily armed military swat team members delivered by helicopters looking for something to kill at dawn.

Kiwis becaue of their isolation are even more easy for the elite to manipulate and unless you settle in the bay of islands you had better like rain, cold and damp. 

Wed, 08/08/2012 - 20:10 | 2689440 AldousHuxley
AldousHuxley's picture

They gave you cheap credit to buy middle class life style (student loans, homes, consumer goods) to hide the fact that they took your job to Asia.

 

Now after a generation of wealth transfer as a result of increasing productivity (more hours, more skills, more risk to labor), people are finding out the truth: retirement is non-existent, housing is just growing on inflation, their children in six figure student loan debt unemployed, food and other necessities of life are expensive, and worst of all 99.9% are powerless to do anything about the system.

 

 

Thu, 08/09/2012 - 00:33 | 2690080 IBelieveInMagic
IBelieveInMagic's picture

The model's expectation was that while there is job exports at the lower end, the US economy would be able to keep creating new high tech industries and related jobs (explains the encouragement for top science talent from all over the world to come and study and settle here). Unfortunately, that job creation has not happened commensurate to the pace of job loss.

But, the US (especially the elite) is loathe to lose the dollar reserve status as it allows Americans to seemingly buy foreign stuff for free but the real exchange was initally of low end jobs (and increasingly higher end jobs) and associated technologies to be gradually and then rapidly shipped abroad. But, it still allows the US to create "makework" government jobs and pay endless entitlement payments without triggering very high inflation.

Unfortunately, we are stuck -- can't have the cake and eat it to. Am sure TPTB have calculated that the societal cost (in terms of unemployment, social unrest and degradation of skills of populace) are still lower than the benefits accruing from the reserve currency status to the USA and hence reserve status is being defended doggedly. People don't realize the unbelievable privelege that the reserve currency bestows on the US (at least in the short term).

Wed, 08/08/2012 - 19:11 | 2689345 Walt D.
Walt D.'s picture

Why do you think we went off the gold standard? So that the Goverment could print fiat money. People are paid at least 3 times more than the were paid in 1980. Whose fault is it that they are getting paid in devalued fiat money?

Wed, 08/08/2012 - 18:47 | 2689283 FunkyOldGeezer
FunkyOldGeezer's picture

Is this article any surprise to anyone? At least 50 years ago, those outside the USA would see films and TV shows that showed US workers earning what seemed like fantastic wages. 50 years on, and the figures don't appear to have changed that much.

 

Wed, 08/08/2012 - 18:29 | 2689248 Blue Dog
Blue Dog's picture

It's worse than that when you consider take-home pay and the cost of insurance. Back in 1980 or so I worked for a foundry. Single person insurance was about $20 a month. Coverage was 80-20 for the first $500. After that insurance paid 100% of everything. You couldn't buy coverage like that for $200 a month today. And of course, taxes are much higher today. Not only payroll taxes but property taxes, sales taxes, social security, medicare, etc, etc.

Thu, 08/09/2012 - 02:29 | 2690177 rambo1028
rambo1028's picture

I remember when I had health insurance...that my company and I shared the cost of. It seems like a lifetime ago. I haven't had insurance since 2004. The prices got so ridiculous so fast. Now the company I work for and the one I worked for before this one don't even bother to offer it because what they can and or will offer is just a joke. Sure... I will spend 50% of my take home pay to buy into your insurance policy with a $5000 deductible... effing jokes on us....but of course the "executive" policy is a COMPLETELY different policy. They make me sick... now where is my pitchfork?

Wed, 08/08/2012 - 20:01 | 2689430 Dburn
Dburn's picture

"Back in 1980 or so I worked for a foundry. Single person insurance was about $20 a month."

In 1987 I was able to cover 50 employees and their families for $2900 a month with a $250 deductable and 100% on everything thereafter including RX.  

I don't think either type of insurance is available at any price unless you are a Managing Director at Goldman Sachs where their policies include a one way sex change operation/trip. 

 

Thu, 08/09/2012 - 07:18 | 2690339 northerngirl
northerngirl's picture

The more the government intervenes to bring down the cost, the more it will cost.  I think this is why most people have reached the point of nothing matters anymore, because they feel there is nothing they can do.  We know we have lost what we thought was a good life, and now will do whatever we have to in order to escape the painful reality of the future.

Wed, 08/08/2012 - 21:13 | 2689535 linrom
linrom's picture

What changed--Reagan induced massive illegal migration where the public picks up societal costs of illegal immigration and the rich republican farmers get to keep all the cheap labor productivity gains. I remember when ALL the farmers were either on welfare or receiving farming subsides.

Now they all drive tractors that are more luxurious than Cadillacs and foam at mouth at their Tea Party KKK meetings about some urban welfare queen collecting $130/month in Food Stamps.

Wed, 08/08/2012 - 18:10 | 2689196 I am Jobe
I am Jobe's picture

Meet Cannibalistic Capitalism: Globalization's Evil Twin

http://truth-out.org/opinion/item/10572-meet-catabolic-capitalism-global...

Wed, 08/08/2012 - 18:02 | 2689173 Quantum Nucleonics
Quantum Nucleonics's picture

Liberals will tell you that this is proof of evil rich people stealing from the rest of us.  But the truth is that it's government pushing up inflation to continue financing a near bankrupt social welfare state and every policy fantasy.

Wed, 08/08/2012 - 23:05 | 2689891 cynicalskeptic
cynicalskeptic's picture

Productivity has gone up yet the wages of average workers has gone down......  woprkers aren;t sharing in the increased profitabioity of business - and shareholders aren't seeing increased dividends either.   The top level 'hired help' - the top executives have figured out how to loot the companies they work for - making far more on averafge than they did decades ago..  They are now shareholders themsleves courtesy of stock grants and cheap options.  

A VERY few are earning far more than they were decades ago - at the expense of all others.   At least the Robber Barons put their own fortunes on the line and CREATED companies - and jobs.  Their modern day counterparts loot existing companies and destroy jobs.

Wed, 08/08/2012 - 21:10 | 2689589 linrom
linrom's picture

If the government was really like this, we wouldn't need utopia then, would we? The truth of the matter is that that government funnels all the money to the rich and sticks the poor with the tax bill to pay. But that's not all, the government pays the bankers and creditors for use of the credit money that they don't have--its willed into existence by politician promise to collect taxes to pay it.

Wed, 08/08/2012 - 17:52 | 2689153 pashley1411
pashley1411's picture

The number is meaningless unless you could strip out public sector workers, their minions and hangers-on.   Then you'll get some excitement.

Wed, 08/08/2012 - 17:41 | 2689132 Stuck on Zero
Stuck on Zero's picture

The chart of incomes is worthless without mention of taxes and associated mandated expenses.  Gross is meaningless.  It is the net income, or more importantly, the disposable income that matters. 

 

Wed, 08/08/2012 - 22:33 | 2689818 Fake Jim Quinn
Fake Jim Quinn's picture

Employees are not getting raises but the costs to employers to hire and retain people keep rising. Health care costs through the roof. OSHA. Lawsuits from sex/racial discrimination. Whistler blower cases. Taxes.  

The gubmint mandates are killing the wages of Joe Q. Public. It sucks

Wed, 08/08/2012 - 17:37 | 2689108 dizzyfingers
Wed, 08/08/2012 - 20:09 | 2689438 DeFeralCat
DeFeralCat's picture

I call shenanigans on their chart. They are counting people twice. They are counting you once if you get Medicaid and once if you get SNAP. I work with the poor it is not often that you either have healthcare but no food or food but no healthcare. Though I agree it hardly changes the point.

Wed, 08/08/2012 - 18:49 | 2689289 Raymond K Hessel
Raymond K Hessel's picture

OMG,,

WHY IS THIS NOT AN ARTICLE YET,,,

Wed, 08/08/2012 - 20:30 | 2689477 Cheshire
Cheshire's picture

Because it defines a person living in a house with a person who receives a benifit. When apply that foot note it means the headline is misleading or a deliberate mathematical lie. If at least two people per household average you divide the literal headline figure by half.

short answer because its not helpful in a search for truth.

Wed, 08/08/2012 - 17:22 | 2689081 FunkyOldGeezer
FunkyOldGeezer's picture

THE one big problem that has to be addressed in the next 50 years is how to pay workers decent wages for less work, so that the whole capitalist dream can be kept alive. Either that or the biggest mass genocide within the human race. Mass unemployment in the labour force certainly won't bring prosperity to nations, nor will piss poor wages in economies where mechanisation and robotisation of once human work, increases.

Wed, 08/08/2012 - 17:49 | 2689144 onelight
onelight's picture

Hey no worries...for you see the Venus Project has a vision of the future, whereby scientists/technocrats rule society, robots do the heavy lifting -- building to architectural designs of great aesthetic value, and manufacturing all that is needed, while humans advance into a well-funded state of gazing at navels, humming kumbaya (the technocratic version, of course), and all is well. No genocide required..  /sarc

http://www.thevenusproject.com

http://en.wikipedia.org/wiki/The_Venus_Project

Seriously, I should not be so cynical since they are sincere, and at least some part of their work will end up in what happens in the future, however many of us are wary of authoritarian systems that are sold as utopias, ready and right around the corner.

Still, you raise a good question, many of us are wondering about -- my simple sense is that a libertarian free enterprise solution that is real, together with approriate and skilled representative governance system, ought to be able to keep people productively busy and free. We can still do that. 

Wed, 08/08/2012 - 17:00 | 2689006 lewy14
lewy14's picture

So what?

Technology and industry have changed so much that the median worker is just less valuable to the economy.

Now we have 3D printing / nanotech / genetic biotech going...

The median worker will become useless.

As in, incapable of adding value to the economy.

This is the "singularity".

Think about this. Systems of production so complex that the median person just can't even find a lever to help pull or a place to stand.

Energy and inputs will still limit "abundance". There won't be enough to provide everyone with "everything" they want. What is the proper wage to pay people who are useless?

Welcome to the future. Which probably doesn't need you.

Wed, 08/08/2012 - 21:27 | 2689633 zippy_uk
zippy_uk's picture

Not so sure - the hunt is on to resource the most exponential technological leap of THE WHOLE PLANET and some of the growing list of technologies is truly astonishing.

Cancer to be cured in ten years
Malaria to be beaten I five years
Round the world air travel in ten years
Electrification of all transport
Cloud computing making for reliable information technology which is dirt cheap to scale
Nano technology to make recycling real and economic

But we need the energy! Raw materials and food to resource it. There is your coming growth. To blame technology for not having a job makes you a Luddite, history proved that two hundred years ago n the industrial revolution.

Wed, 08/08/2012 - 22:32 | 2689815 lewy14
lewy14's picture

I think you misunderstand me.

Yes, commodities like food and energy will be limiters - I said as much. "Abundance" won't be infinite - goods and services won't scale to meet limitless demand. 

At the same time, the median person - the individual of median talent and determination - will become utterly useless. Only exceptional individuals will add value.

I don't see energy production or food production as being any different here. Those production systems enjoy (or suffer from, depending on your perspective) the same technology curve / complexity / efficiency scaling effects as any other industry.

The mediam person will not be capable of adding value here either. Even "growing your own vegitables" requires inputs (tools, fertilizer, water, land) which Joe Average will not make the most efficient use of.

I'm not casting any blame or offering any solution. I'm just saying that the early stages of the "singularity" are already here in the form of deep, persistent structural unemployment, and it's only going to get worse. In fact it could get much worse, very quickly, in the next decade.

Wed, 08/08/2012 - 17:00 | 2689004 chogopogo
chogopogo's picture

Although there are no female income figures provided, that article makes me think to the feminist movement and its (rightfully) agenda of equal salary for equal work. I don't know why the most people think that this equality means  rasing womens' salary. One of the most important cost for a business is the workforce cost therefore there is an important incentive to decrease the males salary, rather to increase the womens' income. That means overall a decrrease in the family revenues.

Oh! I forgot! Family is obsolete! In the future could even become dangerous for the country / world economy.

Wed, 08/08/2012 - 16:59 | 2689000 irie1029
irie1029's picture

Ron Paul illustrated it best with the silver in a silver dime capable of buying a gallon of gas today.  Fuck Obama and Romney and the Banksters.

Wed, 08/08/2012 - 16:34 | 2688879 kornholio
kornholio's picture

bullish

Wed, 08/08/2012 - 16:23 | 2688848 SAT 800
SAT 800's picture

You just noticed? Wow, you're really not very well-informed. This is very well distributed information. The other chart shows where the wages went; US Wages as a share of production went down. There is a ruling class, there is a class war, it is a war against you, and they are declaring victory. Did you enjoy your nap?

Wed, 08/08/2012 - 16:09 | 2688807 TideFighter
TideFighter's picture

Buy a 10x12 Ted-Shed and put it on a $500 lot. Soon it will be worth enough to re-finance and pay off your student loans, credit cards, etc.  /sarc

Wed, 08/08/2012 - 16:11 | 2688801 I am on to you
I am on to you's picture

G.W,isnt it same story in most places these days,we were all outsourced,to east.

All jobs have been shipped of to China,and in the begining it was just sooo fine,but now the chek has comed to be cashed in,reality is knocking everybody in their face.

It was given from the very start of this insanity,like lighting a candlei only goes to the end,then it burns out,a lot of light in the beginning,self evident like !On a long enough timeline ect!

Wed, 08/08/2012 - 16:07 | 2688799 TideFighter
TideFighter's picture

Now add in the lack of available health insurance and retirement benefits, compared to back then, makes the '09 levels even more pathetic. This week alone, two fully-employed relatives of mine WITH health insurance are asking advice about filing bankruptcy due to poor insurance coverage.

Thu, 08/09/2012 - 04:35 | 2690247 Tapeworm
Tapeworm's picture

http://market-ticker.org/akcs-www?post=209663

 Read the link and follow the links to the OKC doctors to see what is going on.

Wed, 08/08/2012 - 16:36 | 2688888 kornholio
kornholio's picture

that's bullish

Wed, 08/08/2012 - 16:07 | 2688798 TideFighter
TideFighter's picture

Now add in the lack of available health insurance and retirement benefits, compared to back then, makes the '09 levels even more pathetic. This week alone, two fully-employed relatives of mine WITH health insurance are asking advice about filing bankruptcy due to poor insurance coverage.

Wed, 08/08/2012 - 16:02 | 2688777 flattrader
flattrader's picture

Uh, women don't work?

 

Wed, 08/08/2012 - 16:09 | 2688810 JohnnyBriefcase
JohnnyBriefcase's picture

Oh they show up alright but weather or not they work is debatable.

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