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Inflation Has Eaten Up Nearly 100 Percent of Hourly Wage Gains Since 1973

April 13, 2022

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1:00 pm

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32 comments

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Economics

Hourly earnings data from BLS, chart and inflation calculation by Mish

Production and Nonsupervisory Wage Details

Real (inflation-adjusted) wages for production and nonsupervisory workers increased from $8.04 in January of 1964 to $9.38 in February of 1973. That about a 16.7% gain but it was over 9 years.
Nominal wages rose from $2.50 to $4.05 that’s a 62% gain over 9 years.
In the next 50 years real wages rose from $9.38 to $9.64, about half-a-penny per year on average.
In nominal terms, wages rose from $4.05 in February of 1973 to $26.95 in March of 2022 but inflation ate nearly 100% of those gains.
The series is normalized to the 1982-1984 CPI.

Total Private Sector Wage Details

The total private series only dates to March of 2006.
Since March of 2006, nominal wages rose from $20.04 to $31.73.
Normalized to the CPI Index for 1982-1984, real wages rose from $10.04 in March of 2006 to $11.03 in March of 2022.

Real Hourly Wages Dive Again in March, Negative for 13 of Last 15 Months

A soaring CPI had led to negative real earnings. The drop in purchasing power was steep in March of 2022.

For details and discussion of recent data, please see Real Hourly Wages Dive Again in March, Negative for 13 of Last 15 Months

For detailed discussion of the CPI, please see CPI Rips Higher to 8.5 Percent From a Year Ago, the Most Since 1981.

This post originated on MishTalk.Com.

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32 Comments

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GodfreeRoberts

4 years ago

Chinese workers’ hourly real incomes have doubled every decade since 1972, as labor force participation has risen to 72%, (vs. our 62%).

Jojo

4 years ago

Reply to GodfreeRoberts

So they’re now up to $3/hr after 50 years?

Lisa_Hooker

4 years ago

Reply to Jojo

What’s important is how much can you buy with that $3/hr today.

vanderlyn

4 years ago

sound money would help 99% of amerikans of all classes. this is something proven throughout the ages. when the ruling class clips coins or prints currency, the 99% suffer to the 1% who do the printing and clipping for their own benefit. it’s called debauchery

vanderlyn

4 years ago

as many have alluded, the post ww2 decades in US were an aberration. end of ww2, us has same percentage of humans on planet as today. roughly 6%. but we had perhaps close to half the wealth and such of the the globe after 50 years of wars in eurasia continents. the 50s to 70s were a ridiculously lucky time to be alive in pax dumbf*(kistan. a village idiot could live large without ever really working or studying too hard. now we are back to a world more normal where one must work and study hard to get a nice life. i see the kids from stuyvesant HS, the number one, public magnet school, in nyc, in my hood. i believe they get 30,000 plus applicants for 800 slots per freshman class. it’s mostly immigrant kids or kids of immigrants. mostly asians……..thank heavens for the immigrants. nyc hasn’t had such a large percentage of immigrants since pre 1920s door shut to immigrants. amerika just might luck out with allowing all the harder working folks both skilled and semi skilled in. the native borns are just not hungry enough for now. perhaps that will change in another few decades. i’ve lived all over west coast and deep south. the work ethic of immigrants or first generations from africa to asia to latin world is a good thing. in spite of the know nothing party of trumpanzees.

StukiMoi

4 years ago

How could that not be? Who else would be paying for the gigantic welfare checks handed out to idiots for “owning” idle, decaying shacks?

As well as for even greater idiots dumb enough to believe picking random three letter codes they know nothing about, has anything whatsoever in common with “investmenting?”

The wealth these nothings have amassed, has to come from somewhere. Do the indoctrinated moron classes really belive it is the fungus in their “home’s” walls, which created the wealth they have been handed? Or that it is their somehow magical ability to pick random three letter combinations they have no clue about? I realize this is the DumbAge and all, but man, are things THAT bad???

Of course, in the real world, all that wealth has to be created by someone. As in, someone doing productive work. Not someone sitting on the couch proud of himself because his tennis socks go up, up, up!!

Then, once the wealth has ben created by people doing real work, it has to be transferred from the ones who created it, to the idiots sitting on the couch. Such that the latter can be told his wall fungus created lots of wealth for him over the past decades. Such transfers cannot somehow NOT make the ones doing productive work less wealthy.

None of this is any harder than that. No magical, mystical, jargon-filled made-up scary bedtime story consisting of Scary Chinese Child Laborers Jumping Border Fences to Steal “Our” Skillllzzzz is required to explain any of it.

ALL that has happened; and is happening; is that people who produce real wealth have been; and are being; robbed. In order to hand the wealth they have created; and are creating; to idle (or at best makeworking) useless idiot leeches, who neither served; nor serve; any useful economic purpose whatsoever.

Anyone who gets robbed of more and more of what they create every year, will end up with at best a flat income. That’s simply an inevitable outcome of being robbed. Is that really so darned hard to comprehend? Again, yes I know it’s the Dumbage and all, but are things really THAT bad now????

Lisa_Hooker

4 years ago

Reply to StukiMoi

I assure you that they are that bad.

ColoradoAccountant

4 years ago

How can they make and ship dumbbells across the ocean and to the interior of the US for less than we can make them here?

vanderlyn

4 years ago

Reply to ColoradoAccountant

shipping dumb bells? you mean the MAGA corps are manufactured and imported now? how about dumb bells to the donbass?

Jojo

4 years ago

Reply to ColoradoAccountant

As an accountant, this is a rhetorical question, yes?

Jojo

4 years ago

This is why I keep saying that everyone is going to need a wage boost to $150/hr to stay comfortably afloat.

Felix_Mish

4 years ago

Gosh, it’s almost like the “CPI” is designed to mirror wages of the common man.

Tony Bennett

4 years ago

“wages for production and nonsupervisory workers is nearly the same today as February of 1973.”

…

Well, Wall Street realized they could encumber the masses with debt burdens (and pocket the wage gains for themselves).

Works great (for them). For a (long) while.

RonJ

4 years ago

“Accounting for CPI inflation, wages for production and nonsupervisory workers is nearly the same today as February of 1973.”

Even Steven. In the general sense, a cost of living raise for almost 50 years.

Christoball

4 years ago

The quality of life was better in 1973.

Tony Bennett

4 years ago

Reply to Christoball

With no electronics to consume (waste) my time … forced to play outdoors … had the highlight of my “athletic career” … won the local PP&K.

Nailed the kick of my life when it nearly landed on the tape.

Zardoz

4 years ago

Reply to Tony Bennett

70s we’re pretty good for me, dirt bikes and rifles provided by dad, ran with a pack of similarly equipped heathens. The electronic and computer stuff I scrounged and saved for (dad didn’t see any value in that stuff) are what made me successful now though. However, I would enjoy being a heavily armed Evil Kenieval if it paid worth a damn. My friends that took that career path all ended up in the mines.

vanderlyn

4 years ago

Reply to Tony Bennett

i peaked in 6th grade being captain of field day team. the height of my athletic and managerial career. been a long slog down for past half century.

Christoball

4 years ago

Reply to Tony Bennett

It was the best of times, It was the best of times.

Jojo

4 years ago

Reply to Christoball

Yes, I remember! Sex, drugs & rock & roll, no real cares…

Lisa_Hooker

4 years ago

Reply to Jojo

I can’t recall too much of the late 60’s/early 70’s. It’s a bit foggy. But It was one heckofa great time all things considered. 5 1/4% passbook savings. Wish I couldn’t remember most of post 2006.

vanderlyn

4 years ago

Reply to Christoball

golden age of post ww2. lasted from 1945 to late 70s. the easiest time on planet earth was in amerika during those 30 years. 3rd base life for us all lucky to have lived some of them years. like hitting lottery.

Anon1970

4 years ago

In the generation after WWII, American factories faced little foreign competition. Unions could strike for higher pay and when the strikes were over, companies would just raise prices. By 1973, US auto workers were probably overpaid relative to their job skills. Increased foreign competition eventually brought this economic model to an end in the Great Recession. Too many American companies rested on their laurels rather than taking advantage of improvements in technology. Xerox never managed to apply its advances in photocopying to digital photography and inexpensive home laser copiers. Zenith lost its lead to Sony and eventually went out of the TV business.

Gimmiedajuice

4 years ago

Reply to Anon1970

Toyota, Honda and Nissan were able to overcome the intrinsic bias against Japanese products (due to WWII) by producing smaller, higher quality cars. They ended the dominance of the “big 3” who also failed to innovate and were still producing gas guzzling behemouts in the late 70s, or unreliable and ugly products like the K car in the 80s.

By the mid-80s Sony, Yamaha etc dominated the electronics market.

There are many more examples.

Zardoz

4 years ago

Reply to Gimmiedajuice

Hey now, we made Vegas and Pintos!

vanderlyn

4 years ago

Reply to Zardoz

and corvairs, i think. my dopey brother had 2 of them.

davidyjack

4 years ago

Given the huge increase in productivity in US real wages should be way up since 1973 for the median worker. The owners of capitol are taking too large a share for themselves.

KidHorn

4 years ago

Not unexpected. Over a long enough time frame, real wages should stay flat. You can’t print your way to prosperity. May seem it’s working over the short term, but long term everything reverts back.

This is why raising the minimum wage will never improve the overall standard of living.

Zardoz

4 years ago

Reply to KidHorn

Given as there are more than twice as many people as there were in 1973, and a lot fewer resource, I’m surprised wages even broke even.

TexasTim65

4 years ago

Reply to Zardoz

Agreed. Obviously it’s due to productivity gains (computers, automation etc) that have compensated for resource depletion.

jiminy

4 years ago

Reply to Zardoz

More people, lower wages. Quality of life is not important in the third world, only more ninos.

ColoradoAccountant

4 years ago

Reply to jiminy

That’s called a farm family.

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Inflation Has Eaten Up Nearly 100 Percent of Hourly Wage Gains Since 1973

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