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US Wages Finally Get Back to Where They Were in 1973

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Re: US Wages Finally Get Back to Where They Were in 1973

#81

Post by thelock85 »

wutbrodo wrote: post #65
wavefunction wrote: post #64

Earlier quoted context omitted.

>no excuse for a native born American Racial disparities along with systemic racism could provide an explanation. Attained education levels as well. Just some thoughts.

Immigrants' racial makeup would, on average, predispose them to more systematic racism (in the negative direction) than native-born Americans, no? Unless I'm misunderstanding what you're trying to say.

The comment is vague, but I interpreted systemic racism as a function of slavery > failed reconstruction > black codes > sharecropping > 100-year effort to legislate the 13th, 14th and 15th Amendments > Civil Rights Act of 1965 > manipulating property titles/deeds to circumvent legal protections around right to own property > mass incarceration... small points debatable, but clear historical and empirical through line since late 18th century.

EDIT: All of these things affect immigrants of color (who may come from worst circumstance) but they have a “blank slate”, not fighting a legacy.

Re: US Wages Finally Get Back to Where They Were in 1973

#82

Post by danans »

rayiner wrote: post #78
danans wrote: post #62

Earlier quoted context omitted.

> The article is misleading in an important respect. While real wages haven't budged much (they certainly haven't declined), benefits, which are tax-advantaged relative to wages, have increased quite a bit. For example, while wages rose 3% since 2000, benefits rose 22%: https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... . Despite the article not mentioning benefits, the primary reason for the increase in…

"Increases in labor compensation are being eaten up by increases in benefits costs" is a different statement than "labor compensation isn't increasing." From the employer's point of view, whether they're spending 22% more because of higher salaries or more expensive benefits doesn't make a difference. And the implications are different for policy. If labor compensation isn't going up, that suggests a structural probl…

> If labor compensation isn't going up, that suggests a structural problem in the economy. If labor compensation is going up, but it's being eaten up by increasing healthcare, education, and housing costs, then that suggests targeted reforms are necessary in those sectors.

Both are true, simultaneously.

For the majority of workers, wages are historically static despite rising GDP, and that requires reconsidering the structure of the economy (in particular how it has changed in recent decades).

And indeed we need targeted reforms of the highly inflationary sectors.

Re: US Wages Finally Get Back to Where They Were in 1973

#83

Post by rayiner »

danans wrote: post #82
rayiner wrote: post #78

Earlier quoted context omitted.

"Increases in labor compensation are being eaten up by increases in benefits costs" is a different statement than "labor compensation isn't increasing." From the employer's point of view, whether they're spending 22% more because of higher salaries or more expensive benefits doesn't make a difference. And the implications are different for policy. If labor compensation isn't going up, that suggests a structural probl…

> If labor compensation isn't going up, that suggests a structural problem in the economy. If labor compensation is going up, but it's being eaten up by increasing healthcare, education, and housing costs, then that suggests targeted reforms are necessary in those sectors. Both are true, simultaneously. For the majority of workers, wages are historically static despite rising GDP, and that requires reconsidering the…

That is not necessarily true. There is data showing that total compensation is rising at the same level as labor productivity, and the percentage of national income going to labor, when accounting for benefits, has been extremely consistent since 1970: https://www.nber.org/digest/oct08/w13953.html.

If we assume the status quo in 1970 was acceptable, then the data shows no need for "reconsidering the structure fo the economy." Rather, labor compensation grew just as fast as it was "supposed to" but that growth was eaten up by a handful of sectors.

Re: US Wages Finally Get Back to Where They Were in 1973

#84

Post by bfrydl »

supersleepgrump wrote: post #79

I really think these numbers are antiquated, and with modern data science, a more robust picture of wages and employee compensation will emerge. The median salary only accounts for the top 30% of Americans, and almost every job that pays more than $23/hr requires a college degree, not to mention that training / education / certification is financed through families and individuals, increasing their debt burden, which…

> The median salary only accounts for the top 30% of Americans

I'm not a mathematician but this doesn't sound right to me.

Re: US Wages Finally Get Back to Where They Were in 1973

#85

Post by nostrademons »

Wow the 1970s were not kind to inflation-adjusted wages.

It's interesting to look at this graph through the lens of demographics & generations. The post-war wage boom from 1949-1963 corresponds almost exactly to when the Silent Generation (those born during the baby-bust years of the Depression & WW2). The peak of the graph in 1973 corresponds to the initial entry of the peak of the Baby Boomers (1955) into the workforce. There's a rise from the 90s onwards corresponding to Gen-Xers entering the workforce (at 22 now, since college degrees have become more prevalent) and the G.I. Gen retiring, but it stalls out in 2005 just as the first Millenials start entering the workforce.

Maybe there's actually something to the Econ 101 models about factors of production and how a relative shortage of labor increases labor's share of national income relative to capital while a glut does the opposite.

HS-educated members of generation after Millenials (born 2001-onwards, and tiny - fertility has been dropping to record lows) start entering the workforce in 2019; college-educated ones in 2023, and the peak of the baby-boomers starts retiring in 2020. Perhaps we'll see another sharp rise in wages in the near future, assuming we don't destroy ourselves because of the coming stock market crash as all the baby boomers try to cash out their 401(k)s at once.

Re: US Wages Finally Get Back to Where They Were in 1973

#86

Post by danans »

rayiner wrote: post #83
danans wrote: post #82

Earlier quoted context omitted.

> If labor compensation isn't going up, that suggests a structural problem in the economy. If labor compensation is going up, but it's being eaten up by increasing healthcare, education, and housing costs, then that suggests targeted reforms are necessary in those sectors. Both are true, simultaneously. For the majority of workers, wages are historically static despite rising GDP, and that requires reconsidering the…

That is not necessarily true. There is data showing that total compensation is rising at the same level as labor productivity, and the percentage of national income going to labor, when accounting for benefits, has been extremely consistent since 1970: https://www.nber.org/digest/oct08/w13953.html . If we assume the status quo in 1970 was acceptable, then the data shows no need for "reconsidering the structure fo the…

That paper switches out the CPI for a statistic of its own invention, "implicit price deflator for the output of the nonfarm business", which is far more charitable to its conclusion that workers have taken home a consistent percentage of economic growth since the 1970s.

But the paper completely avoids the problem of how those gains are distributed across workers in the economy, that is, it doesn't address income inequality trends at all (the author was an economist for Reagan, so that's not terribly surprising).

Even if the paper's statistics are taken at face value (that labor share of GDP has been consistent since the 1970s) it's simultaneously true that the majority of GDP growth has gone to those at the high end of the income distribution in the time period it covers. You might not call that an economic structure problem, or even consider it a problem at all, but many would reasonably disagree.

Re: US Wages Finally Get Back to Where They Were in 1973

#87

Post by refurb »

uxp100 wrote: post #67
refurb wrote: post #52

Earlier quoted context omitted.

A teacher (grandpa) and a part-time worker (grandma) supporting 2 babies and a senior (great grandma), yet still able to buy a home in Millbrae and a plot of land in Tahoe (which my family still has to this day) I can guarantee you right now, you could buy a home and a plot of land that will be out of reach for most people 40 years from now. The question is - where will that be? Your grandparents probably had no idea…

Lake Tahoe has been popular way longer than you are giving it credit for. It's had tourists for over a hundred years, and Squaw Valley hosted the Olympics in 1960.

I don’t disagree, but the wealth in the Bay Area has increased significantly just in the past 20 years.

That probably took Lake Tahoe from “expensive” to “astronomical”.

Re: US Wages Finally Get Back to Where They Were in 1973

#88

Post by paulryanrogers »

dsfyu404ed wrote: post #73
kaycebasques wrote: post #28

Now that I’m a bit older (29) it’s fascinating to reflect back on my childhood and teenage years in the context of economic trends. I’ve been interviewing my grandpa to make a biography of his life and it’s mind-blowing to hear about how different the 50s were. A teacher (grandpa) and a part-time worker (grandma) supporting 2 babies and a senior (great grandma), yet still able to buy a home in Millbrae and a plot of…

My grandfather supported nine kids on a single government salary and he took them on a vacation to Cape Cod every year. He was a compliance auditor for a federal agency. He wasn't the only person like this. His experience is totally unremarkable. It's just amazing how well off everyone was back then.

Had a grandfather who was a cookie salesman and lived comfortably, even buying a cottage and boat.

I suspect it was just a bubble though since his parent's generation were mostly farmers working 12 hour days.

Re: US Wages Finally Get Back to Where They Were in 1973

#90

Post by tathougies »

akozak wrote: post #69
tathougies wrote: post #63

Earlier quoted context omitted.

I guess I find the shock that this worked out rather strange. My parents immigrated to this country 30 something years ago. My dad was a salesman and my mother a teacher and they managed to raise two children, send us to private school (catholic, so cheaper than others), pay for music lessons, support my grandparents and aunt who lived with us for a while, and sponsor my entire family. And they owned their home and b…

Worth remembering that housing (and I presume land) is far more expensive than it used to be. https://www.census.gov/hhes/www/housing/census/historic/valu...

Perhaps that's true, but given my parents immigrated here at 30 with no money, and managed to do it, I don't feel that is really an excuse for me, since I have an 8 year head start.

Like I said, thrift. We were certainly poorer than our friends and had less stuff. Americans do not like that idea.

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