Posted on 06/25/2026 8:43:49 PM PDT by anthropocene_x
Wages and salaries for U.S. workers make up the smallest share of economic output in history, according to records going back to 1947.
The U.S. as a whole gets more prosperous every year—but less and less of that prosperity is showing up in workers' paychecks.
That's according to fresh analysis by researchers at the Federal Reserve Bank of New York. In a blog post on Wednesday, the researchers highlighted the declining share of the nation's economic output going to workers in the form of wages and salaries, as opposed to corporate profits and capital.
Why have workers taken home a smaller and smaller share of economic output in the U.S. and other advanced economies? Many researchers have landed on different answers, including the decline of unions, the rise of China as an economic power and technological change, for starters.
(Excerpt) Read more at investopedia.com ...
Based on that, starting about 50 years ago, gas should be $32 a gallon.
Rent should be $6400 for an average apartment.
An average pickup truck should be $80,000.
Blue collar income should be 224,000 a year.
The pickup turned out about right.
When the price of labor per unit of output increases, entrepreneurs will seek technology the substitutes capital for labor. Look at almost any manufacturing industry (e.g., auto) and the trend has been to make the substitution (assembly line robotics). In many cases, unions have priced labor out of existence.
Gee. Printing more money out of thin air screws the people who can only trade labor for money.
Who could see this coming?
Not anymore in Congress, obviously.
“ Based on that, starting about 50 years ago, gas should be $32 a gallon.”
Hmmmm…… Fifty years ago, gas wars had the price to 25 cents per gallon. Good beef was $3/lb.
Ten times in 50 years isn’t enough?
Which is why we need to reverse illegal immigration and increase the fee on foreign work visas high enough to ensure companies only resort to bringing in foreigners when there truly is a critical shortage in the US or the person they’re bringing in is a superstar who is worth the fee.
The welfare and illegals are getting the big share.
That'd be about an average 7% inflation rate over that time period.
I think the fed "targets" 2% to 3%.
The math for doubling-time (or cut in half) is to divide the rate into the natural logarithm of 2, for a continuous growth model.
To estimate, divide the rate into 69 or 70, e.g.
3% doubling time about 23 years.
2.5% doubling time about 28 years.
2% doubling time about 35 years.
Car inflation is out of control due to regulation. The rate of increase for the price of the average car has exceeded that of the average income since the 70s.
Now do food and housing prices.
“Hmmmm…… Fifty years ago, gas wars had the price to 25 cents per gallon”
And stations would entice you by offering free steak knives, drinking glasses, trading stamps, antenna balls.
Workers can take advantage of this by saving 10% of their income and buying stock.
Then they become owners and investors. Over 30 years, their investment income will become greater than their wages.
Nearly everyone can live reasonably well on 90% of their income.
I recall such being the “rule of 72”. The rule I was taught was to divide the rate into 72 to obtain the number of years to double the principle.
Maybe they figured that was an easier number to worth with for doing calculations in your head.
The math is based on the exponential growth formula, which is the simplest of differential equations:
f(t)=f(0)e^rt
f(t)/f(0)=2=e^rt
ln2=rt
ln2/r=t
0.69314/r=t
Thanks for the math.
I started out paying for college as a certified welder at $25 an hour in the late 80s. Good money back then. Tough work, but good pay. Today, in 2026 dollars, an entry lever certified welder makes $25 an hour. Hard work and crap pay barely more than an entry level grocery store job. Wages are crap adjusted for inflation. BUT. Import the third world and get third world results.
That’s a big “for sure”. I started out in about the early 60s as an auto tech & 50% of shop labor was standard where I lived. Not happy with that, the shops started paying on a different scale not a percentage. When I retired my “percentage” was about 22% & raises were pitiful & few. I would never go back to that even if I was not retired. I DID manage the first few years at a 50% shop rate & managed fairly well. Bought 2 brand new cars in that time period.They were much cheaper then, possibly not in direct proportion to today’s prices.
Congress seems to be at the heart of many of our problems, financially & otherwise.
” Workers can take advantage of this by saving 10% of their income and buying stock.”..........If you are not really making it on your wages it is beyond difficult to save that 10%. I find that now I’m retired I can do that at sometimes, and sometimes even a greater percentage. But not often when I was working.
” Workers can take advantage of this by saving 10% of their income and buying stock.”..........If you are not really making it on your wages it is beyond difficult to save that 10%. I find that now I’m retired I can do that at sometimes, and sometimes even a greater percentage. But not often when I was working.
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