BLS data on real wages shows women are slowly catching up to men.
That’s the good news.
The bad news is real wages for women have only risen at slightly over 1/2 of 1 percent per year for 19.5 years.
Men performed even worse. Real wages for men have risen at a pathetic rate of about 1/4 of 1 percent per year in the same period.
The featured images is from a set of Interactive BLS Graphs on Fred.
The anecdotes and calculations are mine.
I used an Annual Rate of Return Calculator to determine the percentages.
Major Assumption
The numbers assume you believe the BLS’ questionable rates of inflation.
I don’t because the BLS excludes housing prices and ignores asset bubbles. The BLS also dramatically understates health care costs.
Questioning the BLS Medical Care Index
I discuss health care and incorrect BLS methodology in Another Surge in CPI Medical Care Costs.
One person commented “I bought my own insurance and it went up about 180% in the first three years of Obamacare.”
Unfortunately, that’s typical. Anyone buying their own insurance will not believe the purported 4.3% rise in the past year.
I discuss other problems with the BLS’ medical calculations.
Annualized Home Price Increases
Housing Bubble Reblown
Last Chance for a Good Price
The Last Chance for a Good Price Was 7 Years Ago.
Home prices are not in the CPI.
Those who want to buy a home quickly discover wage growth has not kept up with home price growth.
Since 2000, assuming you believe the CPI, wages are going up 0.27% per year for men and 0.56% per year for women. Add them together to get a household and the combined increase is well under a full percent.
Home prices are dramatically outstripping median wage increases.
For those looking to buy a home and for those who do buy their own medical insurance, real wage growth is negative.
American Dream
In case you missed it, 68% of Millennial Homeowners Regret Buying a Home
The top regret “too costly to maintain”.
So congratulations American Dreamers on your 0.34% annualized wage growth since January, 2000, assuming you believe you actually got that.
Mike “Mish” Shedlock
Econ 101 add more labor (women + immigrants) cost of labor declines or grows more slowly . Thats how I see the last 40 years.
I don’t buy my own insurance and I know the 4.3% is BS. My premiums and deductibles have risen in double digit % every year since the un-affordable care act was decreed.
Men don’t get paid the same amount, not even when they have the same private sector job — so why would women get paid the same? We are individuals, not commodity robots. I would expect some women to get paid MORE, and some to get paid less, and the distributions will vary depending on job type and skills and countless other things. The equality thing just seems like another piece of academic hokem.
Have to agree with Mish that overall wage growth has not kept pace with the cost of living. Its not just houses. Health care and education costs spring to mind. Getting a quality repair done on your car, home appliance, etc — you have to have the same work done multiple times to get it right, so the total cost of repair skyrockets. Its called inflation since Mish doesn’t want to say it. Inflation has been higher than official reports, and the bond market is pricing in Fed manipulation, not deflation. Wall Street is experiencing central planning. Main Street is experiencing INFLATION
Peoples salaries don’t just keep up with the median as they progress.
If the job market was as great as reported there would be large increases in REAL terms adjusted for the CPI AND asset inflation. I’m getting real tired with all the yahoo’s talking about how great the job market is because their local situation its strong or they have the polar opposite of Trump derangement syndrome. Sure I’m seeing signs the youth employment is stronger with lots of fast food and small retail posting help wanted signs but lets not confuse a job market that has slowly improved with a hot one. I know lots of skilled 40-65 year olds in the huge urban Southern CA area that can’t get anything other than part-time $15 per hour jobs. Sure my relatives in the Boise Idaho area see great job prospects there but that is a small urban area that is growing like crazy. Kudos to the folks commenting working at non-profits teaching modern job skills, I will look for some around here to direct my underemployed cohorts to.
This is part of the problem. Europeans immigrated to the US and took on low end jobs to get a better life. If someones city or state has a poor job market people should move to where the jobs are. Its not like leaving ones home country and immigrating to a foreign country with a foreign language. This is what the immigrants(legal) from south america are trying to do also. You also saw it during the gfc when, despite obamas anti oil agenda, high paying oil field jobs opened in SD and it saw an influx of people willing to work for the great wages that were offered.
Mish: You can’t add those two rates of increase in a household: even if it were two women, the median increase would be 0.56%. If it was a woman and a man with equal income, the increase would be 0.41% increase, but less if the man’s income is higher than his partner.
So added together in a household it’s not less than 1%, in total it is less than ½ of 1%!
Sorry, missed JanNL’s comment earlier saying the same thing, probably missed the “newer comments” dialogue.
Apparently in NL-Country we are sensitive to math statements.
Wages are rising even for unskilled labor that students and beginners start in. Ask any employer what their biggest challenge is. It is finding labor. I was in the car wash yesterday and a help wanted sign was up. $15/hr. This is happening all over and the bullshit numbers the govt publishes should be ignored. That and their CPI bullshit propaganda numbers are part of their brain washing campaign from the economic politburo. I guess most people buy their outright and deliberate lies. I just don’t get it. I am guessing this is part of the undercurrent towards the migration to socialism.
If not full time or without health insurance try living on it.
Beginner or unskilled labor wages are just that. They are not meant to raise a family on. What is your point?
Shamrock – the chart is clear on that point.
Nominal wages are indeed higher.
Real wages are barely growing an that assumes one believes the CPI.
“Let me put in another way. Take a random sample of 1000 people making the median wage 20 years ago. Now sample how much those exact same people are making now. “
Shamrock – you completely miss the point
We are discussing “Real” inflation adjusted wages – not Nominal wages
The “combined wage growth” is under half a percent. Do not add them together.
100 years ago the business owners werent particularly generous either, and unions were formed to at least try to fight the problem …. and it wont work again?
Peak union membership in the US was never above ~40%, and that was after the government got involved and basically sanctioned unions in the 1950s.
“This assumes that everyone has the same job they did 19.5 years ago.”
It makes no such assumptions.
Start at 2012 or 2013 or 2014
Any time after 2012 wages did not keep up, did they?
Of course if you start at the housing bubble peak, wages did keep up, but housing was also absurdly priced and jobs were not easy to get.
And by the way, many do never advance. They don’t have the skills or are trapped at GM or floating between Walmart and McDonalds or wherever.
Finally, many lost high paying jobs in 2008, 2009, and 2010 and never got back to where they were!
So, start whatever year you like and report back.
Mish
Mish, I assume a typo slipped into this sentence.
“Since 2000, assuming you believe the CPI, wages are going up 0.27% per year for men and 0.56% per year for men.”
Thanks Harry will fix
Let me put in another way. Take a random sample of 1000 people making the median wage 20 years ago. Now sample how much those exact same people are making now. I guarantee they, on average, are making a lot more than the .27% annual increase in the median wage. They are no longer in the 50th percentile, they’ve moved up to 60, 70, 80th percentile, etc. New people have entered the labor force and kept the median wage low.
I have to disagree with your assumption that “many” never advance. Most large businesses have a self-directed career path, where an employee can automatically promote through training, performance reviews, etc. In my company, moving from a Tech I to Tech V is a promotion and will come with a pay increase. No opening necessary, just increase your skills and you’ll get a bump.
There are positions that require an opening/interview for sure, but they also have their own progression path. Only when you get into management do you become static, but you still have performance metric based pay increases available.
I’ve held my current position for what seems like ages now (actually only about 5 years, probably the longest I’ve stayed in the exact same position), in my career. Much of that reason is because I’ve self-promoted my way to the top. There’s still opportunity to move but most moves now are lateral, or would be a net drop in income until I level up again.
Housing, medical care, equities … every market the gov touches becomes unaffordable. But never mind that, it’s climate catastrophe day so everyone gather and yell about how your neighbors aren’t self-sacrificing enough to Gaia.
So, if I’m a guy who jumped in my time machine on 1/1/2000 with $100,000 in my wallet, along with a day’s wages of $100, and came back last month, I’d discover the $100,000 now worth $65,790 and my day’s wages up to a whopping $105.30.
No wonder I’m pissed.
The bubble in govt has created a hole in the pockets of the private sector. When the govt bond bubble pops the deleveraging of govt will be beneficial for the private sector (if one is not dependent on govt).
The best way to wage growth is to switch to a higher paying job. Expecting wage growth in the same job is unrealistic in the era of globalization of labor, higher health care and other costs. Companies have been touting spending more per employee on healthcare as another measure of compensation and thus reducing your wage growth. Studies have always shown your negotiating power is best when you initially negotiate your compensation.
Unless you have some very in-demand skill, the ability to switch jobs, especially in technology, dies about age 45.
Duh!
Somebody obviously had to do productive work for free, in order to create the wealth which The Fed could then redistribute to idle “asset owners.”
It’s not as if wealth is created by neither fungi in the walls of idle, decaying houses; nor by printing Washington’s head on paper pieces. Ergo, the wealth has had to be taken from someone, somewhere. One would hope it wouldn’t take Fields Medal levels of deductive powers, to figure out from whom.
This assumes that everyone has the same job they did 19.5 years ago. In the real world, people move up to higher paying jobs and newcomers take their old jobs with the 1/2% gain in wages.
Yield curve a bit more inversiony today.
“median”
What an evil word.
Bulltards love to hide behind “mean”.
Wage Growth is clearly non-existent even as women catching up to men.
For anyone wanting to buy a home or is buying their own health insurance, wage growth is deep in the red.
Thanks Mish! This was an article I was waiting for. A while ago, I mentioned this in the commentsection. Now, am I correct to infer that basically, the wage-growth is negative or non-existent, when considering inflation, housingcosts and healthcarecosts are rising exponentially?
And one wonders why folks are angry about off-shoring jobs and illegal immigration. The obvious solution is to cut taxes and regulation, especially wrt big banks and financial institutions.
The obvious solution is always to cut taxes and regulations. Especially wrt allowing anyone, anywhere, offshore or not, completely free and unfettered access to undercut and route around Big Anything.
Features, not bugs.