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
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
1973 is when Joseph Robinette Biden Jr entered public “serve-us”. Democrats like steady wages.
Part of some big plan. Or just unintended consciences of closing the gold window and globalization. Followed by individuals with the knowledge and means to better themselves at the expense of society at large.
Never had a
union job. I have pumped gas, served food, drove trucks, loaded dirty carpets
into gigantic industrial washing machines, installed air recyclers into the
weirdest places and many other things. That is how I made my money in high
school and worked my way through college. That’s what we did at the time. It
was normal. In a way I feel more kinship with those who scramble over the border
to get here than those who came contract in hand with a signing bonus and in an airplane . They have
the “root hog or die” attitude which is the same as ours.
Here is a
nice table showing the dance between GDP growth, Inflation Rates and
Unemployment Rates since 1929. Although GDP is not a proxy to wage growth the
Unemployment rate probably is. The Inflation rate is the official one and not
Mish’s. If you has a table using his figures for inflation not necessarily
going back to 1929 I would appreciate viewing it. I believe it would support your case very well since it would show how much the Fed’s policies have disconnected in the last twenty years or so.