[upcountryhorseman]

This does not take into consideration that since 1974, when
so-called free trade began in the U. S., real wages stated
to decline. Also, the rate of productivity stated to decline.

[Luis Gonzalez]

"This does not take into consideration that since 1974, when so-called free trade began in the U. S., real wages stated to decline. Also, the rate of productivity stated to decline."

Free trade has existed since the inception of the Republic, protectionism and excessive tariffs were either the cause of the Great Depression, or made it worse, depending on which school of thought you believe, but you're welcome to prove me wrong, and welcomed to substantiate your claims.

Here's my shot: you're dead wrong.

[Luis Gonzalez]

Consumer electronics are cheaper today than in 1974, gas (even at the current level), was more expensive in 1974, cars are cheaper today than in 1974. Those are just starters.

[1rudeboy]

For the first time since the 1960s, U.S. productivity has been growing at an annual rate above 2.5 percent. As numbers go, this may not seem spectacular, but it has enabled the economy to sustain a very low level of unemployment--less than 5 percent in each of the past three years--while holding retail price inflation to about 2 percent a year. The late stages of most business cycles put irresistible pressure on employers to raise wages, which ordinarily leads to increased prices and in turn acts to slow or stop the expansion. But in the present circumstances, employers can raise wages without upping prices because of increased productivity.

According to the President's Council of Economic Advisers, about half of the increase in productivity since 1995 is explained by increased capital equipment--particularly computers and software--plus increased productivity in the computer-manufacturing industry. The remaining half of the productivity increase may reflect new efficiencies from Internet use by business and the normally greater efficiency of employees during periods of high demand.

The better educated benefited the most from the rise in productivity. Average hourly earnings in private, nonagricultural business increased in real terms by about 16 percent during the past 40 years, but professionals did better: physicians, for example, enjoyed an increase in real earnings of 33 percent in the same period. One way of looking at the benefits of rising productivity is to compare various family income groups. The top 5 percent of families had an increase in income of 129 percent in real terms from 1960 to 1998, while the middle fifth had an increase of 54 percent and the bottom fifth only 38 percent. Family income went up not only because productivity was greater for other reasons, such as the increasing number of wives taking jobs outside the home. The average real income of working Americans, as the chart shows, increased beginning in 1995--undoubtedly made possible by the spurt in productivity over the same period. [emphasis added]

Source: Scientific American