Posted on 07/31/2023 9:31:42 AM PDT by SeekAndFind
BLS charts show interesting trends in real (inflation-adjusted) weekly earnings. Men are getting clobbered relative to women, but everyone is losing lately...
Median real earnings from the BLS, inflation adjusted to the 1982-1984 CPI Index, chart by Mish.
In the first quarter of 1979 men were making $408 weekly. Today, men are making $391.
In the first quarter of 1979 women were making $250 weekly. Today women are making $330 weekly.
Collectively, people were making $335 then and now they are making $365.
Men are getting clobbered, down 4.2 percent, while median women’s earnings have risen 32 percent. These numbers may look silly but you can verify them on the St. Louis Fed FRED database.
Wait, you say, people are taking home more than $365 weekly. Yes they are, in nominal terms. Normally I take numbers and adjust them for inflation. This data is already inflation adjusted, so I had to un-adjust the data.
Median real earnings from the BLS, nominal earnings and chart by Mish.
In nominal terms, men were making $282 weekly in 1979 and $1,186 weekly today. Adjusted for inflation, $282 bought 4.2 percent more in 1979 than $1,186 does today.
Women have certainly fared better. In nominal terms, women were making $179 in 1979 and $1,001 today. In real terms that’s a jump from $250 to $330, a gain of 32 percent.
Nominal hourly wages from the BLS, real wages and chart by Mish.
In contrast to the first set of data where wages are weekly, and calculated quarterly, the BLS produces hourly data monthly. The calculation for this set is the reverse. The BLS shows nominal hourly wages and I calculate real wages.
Last week, someone on Twitter asked what earnings look like adjusted by the PCE price index. Economists tend to use 2012 as the base year for PCE so that is what I used as well. It doesn’t matter, so don’t dwell on the difference in the index year.
For both charts, I went back as far as the data was available. This chart is for production and nonsupervisory workers, not all workers. The hourly data for all workers only dates to March of 2006.
The BLS does not break out average hourly wages by sex. In terms of average hourly wage, the peak was February of 1973. For comparison purposes it’s too bad that data for the first chart does not go back as far.
As a cross check of the first chart calculation, take $28.82 hourly x 40 hours per week and you get $1,153 weekly.
In nominal terms, production workers were making $4.06 per hour. Today they are making $28.83.
In real PCE terms, production workers were making $17.56 then and $22.67 now, a 29 percent total jump over 30 years, about 1 percent a year.
In real CPI terms, production workers were making $21.05 then and $21.72 now, a 3.2 percent total jump over 30 years, essentially nothing.
We can deduce from the first chart that men are getting clobbered relative to women in both median and average terms. You can also say women are slowly catching up to men. Since we do not have a job-by-job breakdown, it’s not easy to quantify these expressions accurately.
Case Shiller National and 10-City home prices indexes plus OER, CPI, and Rent indexes from the BLS.
The latest Case-Shiller home price indexes is for May. It represents repeat sales of the same house in roughly a March-April timeframe.
OER stands for Owners’ Equivalent rent. It’s the price one would pay to rent one’s own home, unfurnished, without utilities.
CPI is the consumer price index.
Rent of primary resident is just what it sounds.
CPI, OER, and Rent as as measured by the Bureau of Labor Statistics (BLS).
Home prices wildly disconnected from the CPI in 2000 and in 2013. The disconnect accelerated in 2020.
After a two-month decline in most markets, prices are again on the rise.
Please recall that housing prices are not directly in the either the CPI or PCE inflation indexes. For those wishing to buy a home, both measures of inflation are dramatically understated.
That means real hourly earnings are even dimmer than I presented above.
For discussion of home prices see The Housing Bubble, as Measured by Case-Shiller, Is Expanding Again.
And please consider this question, Is It Time to Bet on an Inflation Overshoot?
* * *
Were they able to define “women”?
Once upon a time, a man with a HS education could buy a house and support a wife and 3 kids. That’s pretty much the world I grew up in.
Then a college degree became pretty necessary to achieve the American Dream.
Then women entered the workforce. Soon, a family actually needed that second income if it hoped to own a house and have 2 kids.
Then a lot of people decided that the double income was enough to buy a house and some fun toys, and stay up to date on those college loans — but they’d have to skip the idea of having kids.
Recently, young people realized that in some areas, a “starter home” can cost well over $500,000. So, no home for them, they’d just rent an apartment.
But now apartments are unaffordable. So young people live alone, in Mom’s basement. No apartment, no house, no friends, no love life. They may have a job — but what’s the point??
This is a society in decline, and a lot of people don’t see it. A lot of people think that today things are exactly like they were in 1979. “I did it!!!! Kids today are just lazy and stupid! There’s no other reason for their failure!”
But I feel bad for young people. I think society as a whole has failed them.
How long has the term ‘cougar’ been around?
You have it exactly right.
When women came into the work force in large numbers, circa 1977, everything changed: the DINKS could bid up a big house, one that was nicer then a single income would buy.
This causes a float effect on all other similar homes. The comps say they are all worth that, the owners hold out for it, and everyone else had to adopt the two earner strategy to compete. Since most homes were owned outright back then, the sellers could typically hold out. Eventually the whole market is driven up by this inflation. And the process repeats, with the social effects you note.
But there’s one other driver: mass immigration, both legal and illegal. There are over 100 million more people in the US now, virtually all from immigration - the Boomers didn’t even replace themselves. So there’s that much more competition, but this time it’s worse: the competition are people who are part of Protected Classes: South Asians - Indians - are in fact STILL classified that way, and there are a myriad of government sponsored subsidies designed to give them an advantage in home and business finance (look at the SBA programs for them).
A reasonable person would conclude that the people who call themselves the Government basically declared war on their own populace back then. And of course, that’s what they did.
Kids now are going through schools that are much tougher then 1967. What was once Sophomore biology in college is taught to HS freshmen. Taking AP Calculus as a HS junior is ho hum: you won’t get into a UC Engineering school with that - even with an A and a 5 on the AP test - and maybe not even some of the better state schools. ESPECIALLY if you’re guilty of being White. So it ain’t surprising that a lot of them look up the hill and decide...why bother. Too high.
Without the police state we live in this place shoulda blown a long time ago. Right now, that’s all they got: it’s all held together by a ruthless police state. Which of course will eventually fall, and maybe take down the planet with it.
VERY few people are born naturally wanting to work hard and strive for a better life. It's almost always something that has to be taught and instilled from a fairly young age.
Huh. Who knew. Dylan Mulvany was ahead of the game.😉🕺🏻
In ‘79 you were grateful if you had any job at all.
The biggest story of all is the HUGE uptick in wages 2017 to 2020. Look at the slope of those lines!
What could possibly account for such a huge growth in real wages in those years?
What you describe is a big part of the problem. No question. But it was a pincer attack on prosperity. The other pincer: offshoring and deinstrustrialization, which got going bigly in the 80’s and 90’s.
It all started when the dollar was no longer backed by gold.
This problem all started when men started getting pregnant....
Only because men are claiming to be women.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.