Post
Topic
Board Economics
Re: An interesting case of a widespread misconception
by
deisik
on 22/06/2020, 21:56:57 UTC
Care to explain how you arrived at that conclusion from these data? As I understand it, for your claims to be true, the inflation-adjusted curve should go under 0, but it never does
The gray line, with the scale at the left of the graph, shows the average wage in dollars per hour that the worker was paid at the time. In 1973, that was $4 per hour. In 2019, that was approaching $24 per hour

So we can safely throw it away

The red line, with the scale at the right of the graph, shows the average wage in dollars per hour if paid at the value of a 2017 dollar

So you agree that after we hit the bottom in 1995, the wages have been rising in real terms since then, and that has been the case for 25 years. Point proved

Well, I have different data, which actually shows the change in inflation-adjusted wages (more specifically, earnings) over time. It is based on the Social Security Administration wage statistics (link):
I would suggest you read the paper you have shared that table from, because it does not back up the point you are trying to make.

Look at the 5 categories in the table you have shared. Top 0.1%, top 1%, top 5%, top 10%, and everybody else. The higher earners have experienced real wages increases, yes, but "everybody else" has had wage stagnation. You'll also notice as well that the table picks arbitrary dates - 1979 was already down significantly from the 1973 peak. If you compare to the actual peak, that stagnation turns negative

I think we can stick with the "everybody else" group

And then the annual earnings in the inflation-adjusted dollars had been on the rise since 1979 till 2007. And even if 1979 has been deliberately chosen, you can't discard that growth


Here are a few quotes from that paper

You are cherry-picking

Here's the relevant part:

Quote
After having gained 88 % in the first few postwar decades, the annual earnings of the bottom 90 % grew only 17 % since 1979, from about $27,000 to close to $32,000, or 0.5 % per year (one-fourth of the 2 % annualized growth rate for this wage class for 1947–79)

So, all in all, wages outperformed inflation by 17% for 1979-2012 on average