Skip to main content

Real Hourly Wages Have Risen Less Than a Penny a Year Since 1973

Let's investigate how much inflation has eaten wage growth over time.
  • Author:
  • Publish date:
Hourly Earnings and Real Hourly Earnings 2021-11

BLS Notes     

Hourly wage data for production and nonsupervisory workers dates to 1964. 

The data for all private workers only dates to 2006.

The BLS uses slightly different deflators for each series, CPI-U (the standard CPI) for all workers, and CPI-W for production workers.

Key Points

  • In nominal terms, the production and nonsupervisory worker made $4.05 per hour in 1973. Today that worker makes $26.40 per hour. 
  • Accounting for inflation, using 1982-1984 as the base rate, a worker made $9.38 in 1973 and makes only $9.63 per hour today.
  • In 48 years, real wages have risen $0.25. That's just over half a penny per hour each year.
  • Between 1964 and 1973 workers came out ahead. Since then it's practically $0 and that assumes you believe the CPI is not understated.

It's Criminal

For the past decade, until now, the Fed has been begging for higher inflation. 

Promotion of inflation is purposeful theft for the benefit of banks, the wealthy, and the asset holders. 

The poor and those on fixed income suffer the most from Fed policy.

Every Measure of Real Interest Rates Shows the Fed is Out of Control

Case-Shiller Home Price Index Top 10 2021-10
Scroll to Continue

RECOMMENDED ARTICLES

All the bottom half of the nation has to show for Fed policy is the third asset bubble since 2000.

Bad things happen when the Fed ignores asset bubbles. And the way to ignore asset bubbles is to pretend housing, land prices, speculation in Bitcoin, and insane stock market valuations are not inflation.

It's difficult to state the inflation effect on stocks or Bitcoin but housing is one most human beings easily see even though the Fed and Martian economists can't.

On December 29, I commented Every Measure of Real Interest Rates Shows the Fed is Out of Control

My housing-adjusted CPI measure stands at 9.31%.

Try buying a house now on an additional penny per hour. It was actually possible factoring in a second wage earner per household until about the year 1999.  

 See link for details.

Thanks for Tuning In!

Like these reports?

If so, please Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

If you have subscribed and do not get email alerts, please check your spam folder.

Mish