October 9, 2014

For most workers, real wages have barely budged for decades

Wage_stagnationFollowing the better-than-expected September jobs report, several economic analyses have pointed out the continuing lack of meaningful wage growth, even as tens of thousands of people head back to work. Economic theory, after all, predicts that as labor markets tighten, employers will offer higher wages to entice workers their way.

But a look at five decades’ worth of government wage data suggests that the better question might be, why should now be any different? For most U.S. workers, real wages — that is, after inflation is taken into account — have been flat or even falling for decades, regardless of whether the economy has been adding or subtracting jobs.

Cash money isn’t the only way workers are compensated, of course — health insurance, retirement-account contributions, education and transit subsidies and other benefits all can be part of the package. But wages and salaries are the biggest (about 70%, according to the Bureau of Labor Statistics) and most visible component of employee compensation.

According to the BLS, the average hourly wage for non-management private-sector workers last month was $20.67, unchanged from August and 2.3% above the average wage a year earlier. That’s not much, especially when compared with the pre-Great Recession years of 2006 and 2007, when the average hourly wage often increased by around 4% year-over-year. (During the high-inflation years of the 1970s and early 1980s, average wages commonly jumped 8%, 9% or even more year-over-year.)

But after adjusting for inflation, today’s average hourly wage has just about the same purchasing power as it did in 1979, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.

A similar measure, “usual weekly earnings” of employed, full-time, wage and salary workers, tells much the same story, albeit over a shorter time period. In seasonally adjusted current dollars, median usual weekly earnings rose from $232 in the first quarter 0f 1979 (when the series began) to $782 in the second quarter of this year (the most recent data available). But in real terms, the median has barely budged over that period.

Wage_stagnation2What gains have been made, have gone to the upper income brackets. Since 2000, usual weekly wages have fallen 3.7% (in real terms) among workers in the lowest tenth of the earnings distribution, and 3% among the lowest quarter. But among people near the top of the distribution, real wages have risen 9.7%.

Wage stagnation has been a staple of economic analysis and commentary for a while now, though perhaps predictably there’s little agreement about what’s driving it. One theory is that rising benefit costs — particularly employer-provided health insurance — may be constraining employers’ ability or willingness to raise wages. According to BLS-generated cost indexes for wages/salaries and total benefits, benefit costs have risen about 60% since 2001 (when the data series began), versus about 37% for wage and salary costs. (Those indexes do not take inflation into account.)

Other factors that have been suggested include continued labor-market slack; lagging educational attainment relative to other countries; and a broad decline in better-paying jobs and consequent shift toward job growth in low-wage industries.

In a Pew Research Center survey from August, 56% of Americans said their family’s income was falling behind the cost of living, up from 44% in September 2007 — just before the recession hit. More than a third (37%) of Americans in the latest poll said their family’s income was staying about even with inflation; only 5% said they were staying ahead of inflation.

Topics: Work and Employment, National Economy

  1. Photo of Drew DeSilver

    is a senior writer at Pew Research Center.


  1. Anonymous1 year ago

    The problem with basing these numbers on Inflation is that in most urban Canadian markets the CPI and Inflation do not take into account a majority of the real costs that an individual or family face. As quoted in a recent article in the Vancouver Sun the cost of housing (if you buy) in Vancouver currently consumes 88.9% (yes, Eighty Eight Point Nine percent) of after tax income for the average wage earner. According to the Globe and Mail while the CPI and Inflation generally sit between 2 and 4 percent annually the actual annualized cost of living increase for a person who works, owns their own home, drives their own car and has an average number of people living in their household is actually 5.8% from 1984 to 2014 based on Bank of Canada and Real estate Records. You are all losing purchasing power, whether you want to believe it or not.

  2. Anonymous1 year ago

    This is consistent with the findings of a 4-year study for the Teamsters I completed in 1991 showing real earnings per capita peaked in 1972. Not much has changed since then.

  3. Anonymous1 year ago

    Circular math. “Purchasing power” is exactly how they *calculate* “2014 dollars”. One would expect a flat line.

    1. Anonymous1 year ago

      Hogwash. You have to use a currency base year to understand changes in purchasing power over time. That’s the essence of the difference between current and constant dollars, which is the other part of the chart that is not flat.

  4. Ron Krate2 years ago

    Thank you!…And coupled with decades of stagnant real wages for most people has been the transfer of both debt and risk from big business, big banks and big govenment.

  5. Not Really Concerned2 years ago

    Why is it an issue if real wages are flat? Flat, stable real wages indicate that each year people are able to have exactly as much as they had the year before. In a well-developed country, where there isn’t explosive economic growth because we are not in the process of industrializing, like China currently is, why should we be concerned about median wages being flat? I, for one, think that it is a sign that we have reached an equilibrium of supply and demand for work (to over-simplify the economics). Obviously, it would be better if real median wages rose, but at the same time it’s not really negative if they stay the same – people can still afford to buy new cars, houses, cable TV, computers, cell phones, etc.

    What’s more, there’s an overwhelming potential for the growth of this median wage that isn’t being tapped – skilled labor positions are not being filled, and there is huge demand for these types of positions. This article states that 42% of skilled labor positions posted by small business are not being filled:


    Precision welders in the Cleveland area are making $60,000 /year starting because they can’t fill those positions fast enough. And we’re still sending kids to college to get liberal arts degrees so they can work in a coffee shop, why exactly? Where is the vocational education that was the staple of the working class of the 1970s and 1980s? I would argue that with increasing vocational education in high schools and not focusing so much on a college educated population would lead to serious improvement in the median wage. But congress and state governments are still so focused on the college path that they produce all of these education regulations that focus on college as the only path to success.

    I’m telling you, sending kids to college for history doesn’t help the economy. Sending kids to college to learn welding and machining does. Imagine an America where we properly educated the working classes in high school to work in the high-tech industrial economy we have produced here? I’m willing to bet that everybody’s standard of living would rise.

    1. Gino2 years ago

      It’s an issue that real wages are flat because the formula used to calculate inflation is flawed. The cost of living has gone up by double percentage points beyond the inflation figure. Rents have doubled in real money taking inflation into account, the cost of an automobile has more than double again taking inflation into account. The list goes on and on but the only three things that should be used to calculate inflation are housing, food and fuel and these are not even part of the equation… So what if a new TV costs less today than it did 30 years ago (with inflation) It doesn’t matter you don’t need a TV.. you need eggs and milk and bread and meat. Not to mention gas for your car and electricity to keep you overpriced food cold. These prices have gone through the roof (with inflation). So wages staying flat would be find if the actual inflation rate was used.

  6. chad2 years ago

    For all those talking about inflation and gold standard here is a quick note. Changes in the price structure, in the long term, has no impact on no monetary variables. Or in other words in the long run inflation doesn’t make you poor. This is called monetary neutrality, look it up.

    1. chad2 years ago

      Sorry *non monetary (not “no monetary”)

  7. Brandon2 years ago

    The value of the dollar is now primarily tied to inflation. It’s been that way since we went off the gold standard in 1971. That’s why the line is mostly flat since then. If you take your graph back a few decades more, you’ll notice that before 1971 the “Constant 2014 dollars” line was increasing, and then it stopped increasing in 1971.

    What does that mean? All of this hoopla boils down to what might as well be called an accounting trick. It’s not that people suddenly stopped making more money; it’s that the extra money people are making now causes the inflation that causes that little line to remain flat.

    Stop with this nonsense, learn economics.

    1. Fed Upchick2 years ago

      Oh here we go again… Using economics as an excuse for corporate greed.

  8. Dennis Markham2 years ago

    How on Earth can anyone possibly assert wages haven’t increased in purchasing power? House size has doubled since 1973. The life expectancy has increased 9 years. The percentage of income the average American family spends on food has gone from 20% to about 6.5% (even though people keep getting fatter), and a far higher percentage of POOR AMERICANS own air conditioning and televisions today than did the average American in 1970.

    1. Liz2 years ago

      The percentage of income spent on food has been decreasing for the last 100 years. In 1900 it was 40% of a families income, in the 50’s it was 30% and in the 2000’s under 10%. The cost of food has decreased due to advances in production. The same is true for clothing. The cost of food and clothing now is much cheaper but the percentage of income needed for rent has increased over the decades. Today, depending on where you live, rent can take up between 30% – 50% of your income. In the 70’s and 80’s it likely only took up 25%. Electronics were comparatively more expensive in the 70’s then they are today. A 12″ black and white set might cost around $90 which would be about $550 today. You can but an old tv at a yard sale or thrift shop for practically nothing now.

  9. Matt2 years ago

    Why do I ever read the comments? They’re almost never anything but red team trope vs. blue team trope, with a dash of hyper-radical sounding stuff from people who wouldn’t take to the streets and really demand action if there was a good movie in the theaters or a new video game to play instead. Besides, they post online and hang out with like-minded friends, so they’re “politically active.”

    There are a lot of considerations, a lot of possible directions, and a ton of conversations that would need to be had if positive steps are to be taken to make things better. But its much easier to get a fix of righteous indignation, then go right back to not particularly caring, as evidenced by not doing anything.

  10. City On A Shining Hill2 years ago

    My wife and I are struggling sole proprietors, and none of these articles deal with the real problems that small business owners now face:

    1. The self employment tax, at 15.3% is very unfair! Only the employee portion should be paid. And, only employees, not employers, should pay that tax! The NASE has been lobbying Congress for years to allow us to deduct our health insurance premiums on the schedule C, but is always tabled in the committees, even when the GOP has control. Why is this? Big corporations get the tax and regulations breaks, from large campaign dollars. We don’t have those deep pockets to influence our legislators at the state and federal level.

    2. Getting rid of the IRS! Seriously, our nation will continue to struggle economically, if we continue to penalize employers with income taxes. Replace that with fairer consumption based taxes. A 10% VAT on all purchases, including food, drugs, and the million dollar mansions, yachts, private jets, etc. that the wealthy purchase to fund the federal government. Get rid of non-profit foundations, which shield billions of potential tax dollars by getting rid of the IRS. At 30,000 pages and growing, this must be stopped! Those regulations fall on those creating the jobs, and hiring others. For the first time, my wife and I must purchase a tax software to deal with the some 14 forms we fill out, and even after all the deductions, about 20% of our hard earned funds go to Uncle Sam. I wish we had more sympathy. We are the 20 million private music instructors, hair stylists, pet shop owners, private florists, bakers, other strip mall store owners, etc who hire 75% of Americans.

    3. Employer health care- Employers are facing higher medical costs, at 10% a year, and must choose between giving wage increases to paying more for employee health care. I am glad that was mentioned. And, in 2016, ALL businesses over 50 employees must furnish health insurance which has doubled in cost from 2010, or face huge fines. So, those businesses under 50 employees will stay small. Gallup mentioned that more businesses failed last year than started up. Where is everyone going to work in the future?

    3. Regulations which prevent businesses from expanding. Cities, counties, and states have growth management acts, out of environmental concern, that prevent businesses from building new plants. Again, why no mention of this? Small business loans are often hard to obtain, as well, from banks which are more regulated than in the past.

    4. America joins Europe in embracing socialism. Well, don’t expect full employment. And, with fewer Americans working any way, more part time, temporary, etc. so many have dropped out of the labor force, and college grads moving in with their parents. Not a bright future. Los Angeles has 25 thousand homeless, along with San Diego. Affluent Seattle has tents under freeway overpasses, next to high tech businesses paying 100k a year. Why is this? Well, for starters, a studio apartment rent which starts at around $1500 a month!

    5. Bring back manufacturing jobs to once made in the USA. Getting rid of the IRS would do wonders. Our inner city poor could work at making things we use and consume, now made overseas. Why have we allowed this? Apple has the expensive iPhone made in China. Why are not our inner city youth, with so many on welfare and no hope for the future, assembling those phones? Steve Jobs mentioned it was taxes and regulations which keeps those jobs outsourced.

    6. Public education which does not teach small business skills and becoming small business owners to students, starting in junior high, and emphasize the merits of private enterprise and free markets. Fewer young people want to start companies than in the past. Not a good sign for the future.

    As I recall, Europe during the Middle Ages had two classes: The poor, struggling peasants, and the wealthy aristocrats. Our future?

    Well, enough said!

    1. cw2 years ago

      One of the best posts I’ve ever seen. The only problem with your plan is it makes complete sense. The government won’t allow plans that are easy and make sense. We need to go straight to a vat tax like the constitution states. Get rid of income tax. Then there is no reason for the irs. No complicated deductions and loopholes. If you choose to buy the 50k business car you pay in sales tax and don’t have to do these ridiculous depreciation forms. At the end of the year there is always this long drawn out debate in my mind, do I cash out and pay all the taxes or reinvest in more inventory. Taxes are so high its usually the later so I can get more return on that money until one day in the future I cash it out and pay all the tax. I would like to just leave my money in the business for when I have to buy stuff. Then I would pay sales tax on that. I’m a sole proprietor. I feel your pain.

    2. Hector Dox1 year ago

      As I too was a small business owner, I related to the frustrations of the ever larger burden placed on SMEs. However, it seems your frustration is ill targeted to low and medium income earners as oppose to the sectors absorbing the majority of wealth as the US economy grew passed WW2. Ideology aside, I suggest revising the logic of points 2, 4, and 5:
      2. It’s very hard to argue that a regressive VAT is a “fairer” method of taxation, when the majority of, if not all, costs, induced by taxation are passed on to consumers. At the end of the day, increased prices due to a VAT represent an increasingly larger proportional budget reduction for people, as they sit in a lower place of the income distribution. The flaw in the VAT’s logic falls on ignoring the fact that most necessities are not normal goods. For instance, people don’t buy significantly more eggs, water, chicken, as their income increases. “Fair” does not describe a VAT because is disproportionality erodes the quality of life of those who are not as well-off, as compared to the miniscule burden placed on those who have plenty.
      4. Revise the example provided. “A studio apartment rent which starts at around $1500 a month!” is due to housing demand on a geographically limited space with favorable climate conditions, overlapping an area where rents capitalize the premium return on labor induced by clustering benefits of the information industry. The fact that these people are not somehow housed is innately anti-socialist; I think you might be thinking of another economic system that allows for this cause-effect relationship to play out.
      5. No non-interfered profit-maximizing business would pay an American manufacturing employee 10 times as much as they can pay a foreign manufacturing employee simply because they’re American. The only way manufacturing jobs return to America, while prices of raw and processed goods remain as affordable as they are today, would be if society suddenly becomes willing to pay below American minimum wages for manufacturing jobs. And this isn’t to be understood as “a few dollars less per hour”, but payments in the magnitude of $1 or $2 for a day’s work.

  11. mike collum2 years ago

    Loved the article! Loved the lack of nerd-type “equals this but adjust for that.” Today the Oligarchs are re-instituting Slavey for the 80% of America that produces the goods. The USA is well enroute to becoming a Tzarist Russian style economy/government/military with high percentages of people imprisioned trying to break out of poverty.

    The Whores in Wall Street and the “Best Paid (off)” Congress Whores working in league with LEAs and the monetization of Murder by the Military-Industrial complex have already destroyed the country we once knew as the USA. I hope my Grandchildren will repat (in ealry 20s) to Western Europe or Scandinavia. Blinderberg et al have killed our prosperity and our country.

  12. Otto Maddox2 years ago

    Next time, use total compensation, not wages. Otherwise you’re comparing apples to oranges.

  13. Douglass Pinkard2 years ago

    I’m amazed that “purchasing power” appears not to require defining in the estimation of the author. I say this because were I to tell you that I’d gone out and purchased a computer today, you’d say something like, “that’s nice. Mac of PC?” Were this 1973 and I said the same thing to you you’d respond with something along the lines of, “Gee, I had no idea you were a millionaire that you could toss off that kind of money on a thing like that.” And by the way, a 60% rise in health benefits constitutes a GIGANTIC increase in purchasing power.

    1. Aaron Keith Ott2 years ago

      So, when “dad” says he saved a year’s worth of tuition at a summer job back in the late 70s and his kid’s tuition is $30,000/year…that’s ok? But… a computer from the 70s which, lemme tell you, is comparing apples to oranges to computers today as technology has improved so drastically, so quickly as to make them mainstream household luxuries. (Not to mention the fact that although vastly ubiquitous, computers aren’t necessities…since when has a computer put food on the table?) The cost of groceries has doubled since I was a kid. The cost of gasoline has quadrupled. Has anyone’s wages doubled? Quadrupled? Nope.

      The cost of living continues to raise as wages have stagnated for decades in the face of soaring levels of production. Define purchasing power… right. Some things, typically related to technology, have become cheaper, but most everything else just keeps going up and up.

      I think you may have misread that 60% figure. It’s stating that the cost to the employer has risen 60% since 2001. That doesn’t mean people have 60% more benefits, as the cost of medical treatment has skyrocketed. Most insurance plans don’t cover very much and are on a downward trend of covering less. I work for a Fortune 100 company and my insurance is terrible compared to what it was years ago.

      1. Douglass Pinkard2 years ago

        Okay, I’m not sure why “dad” is in quotation marks, though I have an idea why you need to put words in my mouth to object to what I’ve “said.” (The quotation marks around the word “said” are intended to indicate sarcasm, btw). Returning to my actual argument, however, the colleges with the money are the ones that GIVE all the money in the form of scholarships, stipends for room and board, and spending cash allowing you to do minimal outside work while attending class. The evil corporations that are the private universities can’t give the money away fast enough–ditto countless other private sources of scholarship aid–because they’re LOOKING (i.e., DYING) to train the next generation of scientists, entrepreneurs, etc. I can’t figure out when the age Americans not attending school and starving in the streets instead was supposed to have been, but if you think the cost of everything is too high and that that rise has only by funny coincidence coincided with the rise of federal spending as a percentage of GDP and wages fixed by law rather than market price for an hour’s work, then we’ll just have to agree to disagree. Meanwhile, people RACE from all over the planet to get a piece of what we have here and NO countries on this earth elect NOT to try to replicate what we do here unless they’re simply prepared to go hungry instead, or unless there’s some ruling family or junta not willing to grow the economy for stupid and ultimately self-destructive reasons (like listening to Paul Krugman, for example). Look, if you think you’d like to mandate $15/hour for work that a reasonably bright 15 year-old can do, then what will happen is those jobs will eventually and inevitably be replaced by some kind of automated technology and disappear anyway. Ever hear of the American auto industry? You almost wouldn’t have had they not figured out a way to get out from under obligations made when they were nearly the only game in town (i.e., on the planet) producing automobiles anyone would buy. Now that everyone else has figured out how to make them too, however, and because we can’t regulate wages in other countries, we’re just another player producing cars that people won’t buy if they can get an equivalently priced Toyota, instead. They simply can put more in a Japanese car with their cost of labor. Greece’s economy is the only place we’re heading if the advocates of the ever-increasing welfare state are taken seriously, and for those who think we simply should show up at the residences of the evil 1% with all the money we can do that–but what happens when THAT money’s all spent? Because if you think that a nation constructed out of money-losing businesses like the post office is somehow sustainable you’ve probably never heard of the Soviet Union, either. Or understood why China only dragged itself–kicking and screaming–out of the hideous farce that was their economy by ramping up free market capitalism principles in a huge way. Don’t want to live on the couch in your sister and her husband’s apartment? Then don’t pin your hopes for retirement on a manual labor job in 21st century America. And vote free markets rather than welfare stste or crony capitalism in the form of Democrats or Republicans: they’re both just trying to pimp you with their phony declarations of love and pimps can’t love. They only exist to live off of others. Good luck.

      2. Ann2 years ago

        I totally agree with you.its sad what has happened to our country. All because of corporate greed. I remember people thinking Reagan was so great. He is a large cause of all this. I hope they’re happy.
        It shouldn’t require two incomes to have a house and support na family. No wonder we have all the social problems we don oday.

  14. Dersu2 years ago

    Regulation and welfare have grown; wages have not.

    1. Bob Klahn2 years ago

      Regulation has been reduced, which is why wages have not. All the money is going to the top .1%.

      1. Douglass Pinkard2 years ago

        Regulation produces wealth? I’ve never heard that.

        1. Aaron Keith Ott2 years ago

          It doesn’t produce wealth, it forces the mega-wealthy to pay fairer wages more closely in line with production. The problem with our government is that they’re pretty hands off when it comes to big business because the majority of politicians are bought off by those very same businesses.

          1. Douglass Pinkard2 years ago

            While I agree that politicians are property under crony capitalism (not a redundant phrase, btw) I do not anticipate we will agree to a mutually satisfying definition of “fairness.” I suspect you mean “sameness” or “equal” such that the person(s) putting up the capital is on an earnings footing identical to the employee–in other words, that they simply are one of a company’s employees and should be compensated accordingly–but I don’t want to put words in your mouth then argue against them as if they were what you had said as I find that sort of argument dishonest. I will, however, tell you this: you’re not “forcing” me to do anything and that’s the end of that story. I’m not forcing business owners to do anything and I’m not authorizing you or anyone else to do so, regardless of how we settle the issue of what is “fair.” If you don’t want to work for someone, buy a laptop, get internet access, and start a business of your own. Or open a shop on the street (not recommended), but the minute you tell me you’re forcing anyone to do anything I’m afraid I can’t help you. Good luck.

    2. MiserableOldFart2 years ago

      Regulation has been reduced, not increased, and corporations have become more adept at skirting such laws that exist to protect workers and the environment, for example.

      We need MUCH STRONGER regulation of large corporations, including prohibition of corporate money in the political process, which of course will now require a Constitutional Amendment, thanks to the fanatics the GOP put on the SCOTUS.

      All of this is needed but much more: the scourge of what reagan and dubya did to the tax code must be repealed, else this country will continue in the death spiral that reagan put it into 35 years ago.

  15. Kent Harris2 years ago

    According to the debt clock, wages in the U.S. have only gone up by $400 whereas the cost of new homes has gone up by $125,000 since 2000. We are in a huge debt bubble and when it goes we will be in a world of hurt. usdebtclock.org

  16. jim gray2 years ago

    the failure of unbridled capitalism.

    1. DingleSpat2 years ago

      Didn’t you forget to throw in a meme as well?

      That’s okay, the “unbridled capitalism” bit, however regurgitated it might be should suffice.

      1. Mis2 years ago

        Unregulated capitalism will be the downfall of the USA. We are one more idiot like dubya away from a U.S. breakup.

        The “red” states are already conducting Civil War 2.0, every bit as treasonous as the first, in trying to drive the poor out of their states by strangling them until the move somewhere civilized. The UNITED States of America was not meant to work with that kind of economic warfare.

    2. Douglass Pinkard2 years ago

      And yet I’ll bet you wouldn’t abandon ship if someone held a gun to your head. It’s all so awful, yet you’d kill every living, breathing person within a 20 mile radius if it meant escaping having to go where markets aren’t even marginally free like they are here. That’s what it comes to. The consequences of those who insist the U.S. is so awful takes us inevitably and inexorably to tightly controlled prison camps (all socialist countries anywhere ever), or soon-to-be-untenable “success” stories such as Sweden, spending today what was produced yesterday (i.e., before they decided the welfare state should have no bounds) and about as likely to still be held as an example 20 years from now as Cuba was. Or do you think of Cuba and, say, Venezuela as models for how we should all be living? Meanwhile, the freer of the free market economies will still be the ones attracting the world’s most ambitious because you can do something about it here and the rising tide floats all boats. It’s the only reason we HAVE money to distribute so that the “Occupy” folks can sit in local parks objecting to it all from Monday through Friday during business hours while waiting for that week’s government check to arrive rather than taking work they may not enjoy so much. Don’t want to be a security guard or bicycle messenger? Tough. Next time go to class.

      1. Mary Marx2 years ago

        I feel compelled to reply to Douglass Pinkard. I love the idealism of the libertarians. I used to consider myself in their camp. But reality doesn’t jibe with the ideal. Freedom in the market is not the same as personal liberty. I don’t understand how and why that even became a thing. A corporation exists only for the purpose of turning a profit. It has no moral scruples. It’s not meant to. You personally might not decide to fire half your workforce, cut the pay and benefits of the remaining employees, then leverage the value of your company to extract all profit, then sell the company to line your own pockets (because the company was so profitable), if you have employees you know and care about. A corporation, a soulless entity that, again, exists solely to turn a profit for its shareholders, has no moral compunction against doing so. Without regulation, corporations do what they do to make money – pay workers as little as possible, require them to work 60, 70, 80 hours or more per week, provide no benefits, fail to provide safe working environments, pollute the environment, put children to work. We the people, you and I, democratically, are responsible for regulating how corporations do what they do. Their internal pressure is to turn profit. If there is no pressure from us or from our government (which is supposed to be our democratically run collective conscience) to regulate for fairness and rightness, wealth distribution becomes skewed to a very few. Once economic inequality becomes too great, not only is the economy at stake, but so is our democracy. Wealth is generated by labor, and the laborer should rightly have a fair share of the wealth. I certainly have nothing against some people making more less, but a more equal distribution is absolutely essential to a working economy.

        1. Joshua Quinn2 years ago

          Are corporations not responsible to the shareholders? Can they not demand a fair wage for the workers if they feel it is not. Did the normal work week not come out of business, where it was found that it was better to have workers that could consume your product?

          1. cw2 years ago

            That’s most of the problem. What shareholder wants more wages? That means less profit for them. Just look at Walmart stock after they announced higher wages. It this country the rich don’t care who they step on to get their money. Part of this problem I think is due to the fact that the rich rarely see the poor. The shareholders aren’t seeing the warehouse workers or condition they work in. It’s easy to ignore the problem.

  17. MPC3 years ago

    I feel that many in our society, due to corporate brain washing and all the money spent(infinite) to repeat lies over and over until the majority believe the lie,has caused much of the problem. And equal to that issue is american workers forgetting where we came from, what it took for us to have a minimal say in our work-lives,healthcare and retirement. American workers at a max of 35%, fought for equality and won it for nearly all workers. Corporate greed and corporate lawyers have eroded workers ability to exercise rights we no longer have. Absolute Power did corrupt Corporate America Absolutely,then workers fought and died to gain some rights. Those rights have been systematically legislated away since the late seventies until today. It is obvious to me why workers have not had overall life conditions improved and the top 1,2,3,4 and 5% have had massive improvements in their overall life conditions up to 100’s of percent during the same period. Workers may get sick of it again, maybe not, but although it may not be fair sometimes, those who do not exercise their rights deserve to not get what they should.

  18. capoprimo3 years ago

    As I see it, it’s not so much as a lack of a raise in wages, but a reduction of the value of the dollar. So when the government tells us that inflation is being kept in check, we’re being lied to and the numbers are being manipulated.
    Just today, a comment was made that we’re nearing full employment. That’s a joke if I ever heard one before, full employment with some 93 million people who are not participating in the labor force and we’re not even including those on disability. If it weren’t for the numerous social safety nets, the Depression of the 30’s would pale to what we’re currently experiencing!

    1. William Drummond2 years ago

      As to those safety nets, the Repo’s in Congress want to get rid of them to give even more tax breaks and incentives to their corporate masters that put them there. They don’t give a damned about this country, just what someone will pay them so that a bill will pass in their corporate owner’s favor.

      I am in that 93 mill that you mentioned. I want to work but there is not work to be found. What I am trained for and what I have learned to do is now being done overseas for pennies on the dollar. I would have to work for about 1 or 2 dollars and hour to just compete with them. I went from 52k a year to 1-4k a year with no benefits and no unemployment since I was working as a sub instead of salary so that the people that I was working for could fudge the taxes and such.

    2. Seriously?2 years ago

      93 million does indeed include the elderly population, and people over 65 in the U.S. make up about half of that number. And about 10% (roughly) of that number are actively looking. And why do you assume that all of those people are on welfare or some other social safety net? Maybe they choose to stay home and are supported by other means than the government. Or maybe they are in college? There could be many individual reasons. Context and critical thinking are important when reviewing statistics. How many people are actually unemployed AND receiving a welfare check/benefits AND not actively looking for a job AND is not elderly or disabled? Do you have a number for that since that is the point you are trying to get at? And if there are not jobs available for those people, what specifically would you suggest? Sure, go ahead and take away those pesky social safety nets without any jobs or other plan to replace them. When people are hooking, dealing and stealing to avoid starvation or the loss of their home because there is no jobs and no help, I’m sure you will bitch about the rise of crime as well.

  19. Pat3 years ago

    In 1973 what % of wages went to all taxes as compared to 2012?

    1. CAT323 years ago

      Excellent, excellent question.

  20. Bruce Chase3 years ago

    this is what big government does by piling on regulations preventing small businesses to grow. we need to shrink the government especially the I.R.S,EPA,Department of Energy, Department of Education, etc

    1. Teejay3 years ago

      Wages have been flat for 50 years because “big government” has been “piling on regulations preventing small businesses [from] growing.”??? For real ? That’s your argument? What corporate think tank are you trolling for? The American Enterprise Institute, The Heritage Foundation? Corporate interests have bought both Houses of Congress, harnessed regulatory agencies by either cutting their budget or staffing them with imbeciles or do-nothing corporate shills. And Milton writes that flat purchasing power is “positive news”. For Capital it is. Wall Street is ecstatic. Investors couldn’t be happier. Meanwhile the middle of American society has been financially
      raped in broad daylight AND behind their back. Small businesses grow when they have more customers to sell to. People working at Wallmart, K-Mart, McDonalds can’t afford my services when their 2014 buying power hasn’t budged since 1964. Get real!

      1. David2 years ago

        That just is not true! If it were, the impact would have occurred “across the board”, affecting all income levels. However, over a reasonably similar period, the upper 1% has realized an additional $1 Trillion. At the same time, middle and lower class earners have realized almost the same amount in reduced wages. This is adjusted for inflation!

        Government regulation excesses (and there are some!) have little, if anything, to do with the disparity that has occurred. There has been an incredible shift in the concentration of wealth and income. Many CEO’s and other highly paid executives earn as much (or more!) in just one hour as entry level workers earn in an entire year! That most certainly was not the case 50 years ago, or even 30 years ago!

        Why does our economy seem to still be sputtering, even though corporate profits are at record highs? Because folks like the middle class have not shared in that prosperity, and still can hardly breathe!

        1. Steve P2 years ago

          executives “earn” … ? :”receive” would be better. Whether they earn what they receive is a question for serious debate.

  21. Milton Recht3 years ago

    A flat purchasing power average hourly wage for US workers over the past 50 years is positive news. Over the time period, there has been an increase in international imports made with cheaper foreign labor, replacement of US workers by computers and automation, increase in the US in legal and illegal immigrant workers, and a decline in private sector unionization. Yet, average American workers have held their ground and showed that they can effectively compete against foreign competitors and in a technologically challenging world. American workers showed that they deserve to be paid the same as when there was less international competition, more unionization and collective bargaining, and less computerization and automation.

    Plus, lifestyle changes are hidden in computing constant dollars. US workers and their families eat out at restaurants more often, own more telephones (cell and landlines), own more TV’s and computers, are more air-conditioned, etc. Americans spend less on food and clothing as a percent of their paychecks than they did 50 years ago.

    1. Teejay3 years ago

      The real kicker, Drew, is to show the wage-increase-by-quintile chart next to the DJIA during that same 14 year period, no?

    2. Bob Klahn2 years ago

      All of which would be relevant if we believed the stats were honest. Few of us do.

  22. GLM3 years ago

    While interesting, you seem to ignore that back in 1964 most(?) women were not in the labor force so that while individual salaries and wages have remained static, on a household level they will have risen as more and more women entered the workforce.

    1. CAT323 years ago

      Another excellent point. I’d LOVE to see the same chart prepared for changes in “household” earnings (and spending, for that matter) in both 1974 and 2014 dollars!

  23. Dave W3 years ago

    I would like to see a similar comparison made looking at profits and benefits costs adjusted for inflation.