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Over the past few weeks, it has become a common talking point at either major party's convention to talk about the lack of movement in USA citizens' wages since approximately the middle of the 1970s. For example, in Representative Joseph Kennedy III's introduction of Elizabeth Warren at the DNC: https://www.youtube.com/watch?v=CWmRPRg8cEA

[Elizabeth Warren] taught us that impact lay not in classrooms or textbooks, but in a society where wages have not budged in 40 years.

Warren herself repeated a similar claim in her speech, albeit within a mentioned time frame: https://youtu.be/f1N2KurzQsU?t=3m51s

I mean look around — Americans bust their tails, some working two or three jobs, but wages stay flat.

Jimmy M.
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1 Answers1

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Wages in real US dollars were:

$22.41 in 1973.

$20.67 in 2014

enter image description here

See For most workers, real wages have barely budged for decades

For alternative measures, see Reconciling the divergence in aggregate U.S. wage series.

DavePhD
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  • And it's actually worse: from 1973 to 2014, real wages actually `declined` by nearly 10 percent. No wonder people are pissed. – ReasonablySkeptical Jul 29 '16 at 17:13
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    The graph in the link shows wages increased slightly from 1964 to 2014. Cherry-picking a starting point and an ending point can make it look better or worse. If the question is "40 years" use that data. But still it is arguably "essentially flat". – GEdgar Jul 29 '16 at 18:18
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    Note that that pretty much excludes the top earners--who are normally salaried, not hourly. – Loren Pechtel Jul 29 '16 at 19:50
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    [This chart](https://xkcd.com/980/) from XKCD seems to be fairly accurate. – Joe L. Jul 29 '16 at 23:33
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    Note that this excludes benefits, which have grown more expensive over the same time frame. – Brythan Jul 31 '16 at 04:16
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    One could argue that employment **costs** have risen substantially but the gains have been entirely eaten up by healthcare costs leaving nothing for the actual take home pay. – matt_black Jul 31 '16 at 17:04
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    @matt_black: Cheap shot. – DevSolar Aug 01 '16 at 15:56
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    @GEdgar You could also argue that a process change happened in 1973 and that previous data is not comparable with that after. 1973 happened to be the year the US moved to floating exchange rates as part on the Nixon Shock. – James Sep 13 '17 at 09:46
  • @LorenPechtel - the definition of wages is exclusive of salaries. Wages are generally compensation per unit of time (hourly in most cases). https://www.accountingtools.com/articles/what-is-the-difference-between-salary-and-wages.html – PoloHoleSet Feb 06 '19 at 22:51
  • @PoloHoleSet Which is my point--by looking at "wages" you're now seeing mostly the low end jobs while you used to cover a lot of good jobs. – Loren Pechtel Feb 07 '19 at 02:06
  • @LorenPechtel it gets into it in the article, I think you are right that wages here are for production line, non supervisory roles that pay by the hour. Salaried earnings are shown to follow the same trend in the article too.but 840/40 = 21 bucks an hour for average salary? that doesn't make sense. – daniel Feb 07 '19 at 08:33
  • @LorenPechtel - the context in which the comparison is being made to contrast how the best are doing, with how the working class is doing. The claim being made is that the working class laborers are being left behind, despite them working longer hours, more days, with more productivity - that they are not sharing in the increased wealth and profits that society as a whole has seen like they used to. It's a completely honest metric and the most accurate one when examining that aspect of it. – PoloHoleSet Feb 07 '19 at 15:45
  • @daniel - I think when you look at how many service and retail supervisory jobs there are "salaried" - but at a low level (a couple steps up from the minimum wage workers and lead workers below them, but nothing compared to a skill technical salary), it's not necessarily out of the realm of possibility. I'd want to look at how the data was collected for that group before making any off the cuff assessments of the validity, though. It's a way to take your best unskilled labor, give them a raise and responsibility, but then be able to work that more-trusted person as many hours as you can. – PoloHoleSet Feb 07 '19 at 15:51