Wage Growth Has not Matched Productivity Growth

[Toro]

Over time, wage growth should reflect productivity growth. However, that has not happened over the past 20 to 30 years.

• U.S. productivity grew by 62.5% from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12% in the same period. Real hourly compensation grew a bit more (20.5% for state/local workers and 17.9% for private-sector workers) but still lagged far behind productivity growth.

• Wage stagnation has hit high school–educated workers harder than college graduates, although both groups have suffered—and a bit more so in the public sector. For example, from 1989 to 2010, real wages for high school-educated workers in the private sector grew by just 4.8%, compared with 2.6% in state government. During the same period, real wages for college graduates in the private sector grew 19.4%, compared with 9.5% in state government.

• The typical worker has had stagnating wages for a long time, despite enjoying some wage growth during the economic recovery of the late 1990s. While productivity grew 80% between 1979 and 2009, the hourly wage of the median worker grew by only 10.1%, with all of this wage growth occurring from 1996 to 2002, reflecting the strong economic recovery of the late 1990s.

• The fading momentum of the 1990s recovery failed to propel real wage gains for college graduates employed by private-sector firms or states from 2002 to 2010, despite productivity growth of 20.2% over the same period.

The sad but true story of wages in America

The one caveat I would note is that wages are one component of compensation. Benefits are the other. I believe that benefits, particularly medical, have increased at a faster rate of productivity growth thus making up at least part of the difference, though I have not confirmed that

 

[Oddball]

Wages are almost always the last thing to come up.

I can tell you, though, that there are contractors and sub-contractors out there practically giving it away and it's killin' me.

 

[william the wie]

Went to check on an old friend tonight at a place I rarely visit due to three years of road construction. While I was there I ran into a girl who used to run the snack bar. She is going to college to get a BA in psych. I asked if she was going to stay at Target given the employment rate for psych majors. She said no she was going for her JD. How is productivity going to increase if people waste time and money getting such useless degrees?

 

[skeptic]

The one caveat I would note is that wages are one component of compensation. Benefits are the other. I believe that benefits, particularly medical, have increased at a faster rate of productivity growth thus making up at least part of the difference, though I have not confirmed that

well if this analysis didn't include the value or cost of benefits it is useless and intended to mislead.

What's new?

 

[code1211]

Over time, wage growth should reflect productivity growth. However, that has not happened over the past 20 to 30 years.

• U.S. productivity grew by 62.5% from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12% in the same period. Real hourly compensation grew a bit more (20.5% for state/local workers and 17.9% for private-sector workers) but still lagged far behind productivity growth.

• Wage stagnation has hit high school–educated workers harder than college graduates, although both groups have suffered—and a bit more so in the public sector. For example, from 1989 to 2010, real wages for high school-educated workers in the private sector grew by just 4.8%, compared with 2.6% in state government. During the same period, real wages for college graduates in the private sector grew 19.4%, compared with 9.5% in state government.

• The typical worker has had stagnating wages for a long time, despite enjoying some wage growth during the economic recovery of the late 1990s. While productivity grew 80% between 1979 and 2009, the hourly wage of the median worker grew by only 10.1%, with all of this wage growth occurring from 1996 to 2002, reflecting the strong economic recovery of the late 1990s.

• The fading momentum of the 1990s recovery failed to propel real wage gains for college graduates employed by private-sector firms or states from 2002 to 2010, despite productivity growth of 20.2% over the same period.

The sad but true story of wages in America

The one caveat I would note is that wages are one component of compensation. Benefits are the other. I believe that benefits, particularly medical, have increased at a faster rate of productivity growth thus making up at least part of the difference, though I have not confirmed that

This is a transition. Americans, compared to the rest of the world, have been overpaid since the 50's. As the rest of the world industrializes, the wage rates elsewhere will rise and the result will be a buoying of the American Wage Rates.

It won't happen during my career.

However, the rise of middle classes and the rise of open and free, unregulated communication will homoginize the thinking of the world. The "huddled masses" yearning to breath free are still there, but now the dream is being brought to them as opposed to them needing to search it out.

The uprisnings around the Middle East are not a coincidence. They are a result. Kings ruling as individuals are ornaments of a past that no longer exists. Unless the despot is willing to lay low 40,000 subjects, he will be overthrown. If he does this and the flame continues to burn, the only question is whether or not the army will support him next time.

As long as there is an internet, facebook and twitter, the flame will continue to burn.

In 1900, there were 4 democracies in the world. Today, about 81. Some are shakey and some are imperfect. More than half of these rose with the internet.

Democracy and Capitalism are partners. Freedom to choose and freedom to achieve are inseperable. If we can avoid global thermal nuclear war long enough, we will soon all be trading partners and it will no longer be a viable option to wage war.

It would be like Michigan going to war with Ohio. Okay. Bad example. But you get the point.

Democracies of the World
http://www.economist.com/media/pdf/DEMOCRACY_TABLE_2007_v3.pdf

 

[skeptic]

Wages are almost always the last thing to come up.

I can tell you, though, that there are contractors and sub-contractors out there practically giving it away and it's killin' me.

On the bright side the earnings of the wealthiest 1% are ROCKING!

 

[skeptic]

In 1900, there were 4 democracies in the world. Today, about 81. Some are shakey and some are imperfect. More than half of these rose with the internet.

is this a mere coincidence or did half of all democracies evolve because of the internet?

I am pretty positive it is a coincidence.

I am not even convinced yet that even one of the twitter revolutions in the ME will succeed. The internet can be turned off. And guns are still more powerful than butter.

 

[Toro]

Wages are almost always the last thing to come up.

I can tell you, though, that there are contractors and sub-contractors out there practically giving it away and it's killin' me.

Send them my way. We're doing major renos.

 

[Trajan]

Over time, wage growth should reflect productivity growth. However, that has not happened over the past 20 to 30 years.

• U.S. productivity grew by 62.5% from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12% in the same period. Real hourly compensation grew a bit more (20.5% for state/local workers and 17.9% for private-sector workers) but still lagged far behind productivity growth.

• Wage stagnation has hit high school–educated workers harder than college graduates, although both groups have suffered—and a bit more so in the public sector. For example, from 1989 to 2010, real wages for high school-educated workers in the private sector grew by just 4.8%, compared with 2.6% in state government. During the same period, real wages for college graduates in the private sector grew 19.4%, compared with 9.5% in state government.

• The typical worker has had stagnating wages for a long time, despite enjoying some wage growth during the economic recovery of the late 1990s. While productivity grew 80% between 1979 and 2009, the hourly wage of the median worker grew by only 10.1%, with all of this wage growth occurring from 1996 to 2002, reflecting the strong economic recovery of the late 1990s.

• The fading momentum of the 1990s recovery failed to propel real wage gains for college graduates employed by private-sector firms or states from 2002 to 2010, despite productivity growth of 20.2% over the same period.

The sad but true story of wages in America

The one caveat I would note is that wages are one component of compensation. Benefits are the other. I believe that benefits, particularly medical, have increased at a faster rate of productivity growth thus making up at least part of the difference, though I have not confirmed that

mid 90's my company declared a new medical pension fund as part of TC.
Every year of service they would calculate .5% of your salary per year, at end of service, they added a full match ( if over 15 years) of what the total accrual.

You had to direct it towards a medical plan purchase. I figured, if I had stayed I would have had enough to pay the full cost for the same coverage for 8 years, or half for 16 etc....not bad. Of course the drawback is obvious...

 

[Trajan]

The one caveat I would note is that wages are one component of compensation. Benefits are the other. I believe that benefits, particularly medical, have increased at a faster rate of productivity growth thus making up at least part of the difference, though I have not confirmed that

well if this analysis didn't include the value or cost of benefits it is useless and intended to mislead.

What's new?

yes, I am wondering how they would be able to say, calculate peoples profit sharing acct's.? Do co's voluntarily give them a base figure per year for say profit sharing or 401k matches etc...or stock discounts? Options?

I have to say maybe I am just unusual in this sense but, my income (gross) literally multiplied 2.5 times between 95 and 2010 and I know many who can make the same claim or close to it....... ...curiously my take home was only at 1.5....hummmmmm

 

[Mad Scientist]

Went to check on an old friend tonight at a place I rarely visit due to three years of road construction. While I was there I ran into a girl who used to run the snack bar. She is going to college to get a BA in psych. I asked if she was going to stay at Target given the employment rate for psych majors. She said no she was going for her JD. How is productivity going to increase if people waste time and money getting such useless degrees?

Military will take a person with any degree.

 

[Toro]

The one caveat I would note is that wages are one component of compensation. Benefits are the other. I believe that benefits, particularly medical, have increased at a faster rate of productivity growth thus making up at least part of the difference, though I have not confirmed that

well if this analysis didn't include the value or cost of benefits it is useless and intended to mislead.

What's new?

yes, I am wondering how they would be able to say, calculate peoples profit sharing acct's.? Do co's voluntarily give them a base figure per year for say profit sharing or 401k matches etc...or stock discounts? Options?

I have to say maybe I am just unusual in this sense but, my income (gross) literally multiplied 2.5 times between 95 and 2010 and I know many who can make the same claim or close to it....... ...curiously my take home was only at 1.5....hummmmmm

Are you educated? Generally, the more educated you are, the better you have done. I make far more than I did 15 years ago but I'm not representative of the average worker. First of all, I'm better looking ...

 

[Sallow]

This is a transition. Americans, compared to the rest of the world, have been overpaid since the 50's.

And this is the crux of the Conservative argument in America. Right here.

That somehow..the rest of the world..particularly the third world, which has a yawning gulf between rich and poor..has it right..and the US..which has wage parity..well up until some 30 years ago..has it wrong.

Labor for conservatives has no value..and wealth..no matter how accrued..deserves more wealth.

Simple as that.

 

[skeptic]

First of all, I'm better looking ...

better looking than the other bulls in the corrida de toros ?

 

[skeptic]

This is a transition. Americans, compared to the rest of the world, have been overpaid since the 50's.

And this is the crux of the Conservative argument in America. Right here.

That somehow..the rest of the world..particularly the third world, which has a yawning gulf between rich and poor..has it right..and the US..which has wage parity..well up until some 30 years ago..has it wrong.

Labor for conservatives has no value..and wealth..no matter how accrued..deserves more wealth.

Simple as that.

Pretty lame. First off Americans have been disproportionately compensated at the expense of most of the rest of the world.

Second the share of wealth each human can claim is reduced as population increases and resources are exhausted.

If you believe in American exceptionalism then at the very least you need leaders who support your pov. And neither the dems or the repubs do. They all believe and support policies that advance the privilege of a small elite at the expense of our middle class because they all support globalization.

 

[Sallow]

This is a transition. Americans, compared to the rest of the world, have been overpaid since the 50's.

And this is the crux of the Conservative argument in America. Right here.

That somehow..the rest of the world..particularly the third world, which has a yawning gulf between rich and poor..has it right..and the US..which has wage parity..well up until some 30 years ago..has it wrong.

Labor for conservatives has no value..and wealth..no matter how accrued..deserves more wealth.

Simple as that.

Pretty lame. First off Americans have been disproportionately compensated at the expense of most of the rest of the world.

Second the share of wealth each human can claim is reduced as population increases and resources are exhausted.

If you believe in American exceptionalism then at the very least you need leaders who support your pov. And neither the dems or the repubs do. They all believe and support policies that advance the privilege of a small elite at the expense of our middle class because they all support globalization.

What resources are becoming "exhausted"? Seriously? America is exceptional because it out produces the world on almost everything..and does so efficiently. America is exceptional because we have..and draw the most talented innovative people in the world. American is exceptional because it's workers are the hardest working people in the world. America is exceptional because unlike Commies, Americans really did improve the lives of people that work for a living.

And while it's sad to watch a small elite chip away at worker's protections..it also important to realize just why America is exceptional.

 

[Old Rocks]

More has been done to the American Worker than just chip away at his protections. Essentially, the American Worker is being treated as a cash cow. More production for less real wages, higher costs for health care, fewer pensions, and far less stability.

In the meantime, we are told that the upper 2% deserve all that they are getting, and we are just dumb proles that deserve to live at a much lower standard than we do at present. And the present trends are in that direction.

 

[Cuyo]

More has been done to the American Worker than just chip away at his protections. Essentially, the American Worker is being treated as a cash cow. More production for less real wages, higher costs for health care, fewer pensions, and far less stability.

In the meantime, we are told that the upper 2% deserve all that they are getting, and we are just dumb proles that deserve to live at a much lower standard than we do at present. And the present trends are in that direction.

The flooded labor pool is exploited by the very same people who helped to create it.

 

[Mr Natural]

More has been done to the American Worker than just chip away at his protections. Essentially, the American Worker is being treated as a cash cow. More production for less real wages, higher costs for health care, fewer pensions, and far less stability.

In the meantime, we are told that the upper 2% deserve all that they are getting, and we are just dumb proles that deserve to live at a much lower standard than we do at present. And the present trends are in that direction.

The flooded labor pool is exploited by the very same people who helped to create it.

A flooded labor pool is the cheap labor conservative's wet dream come true.

 

[code1211]

In 1900, there were 4 democracies in the world. Today, about 81. Some are shakey and some are imperfect. More than half of these rose with the internet.

is this a mere coincidence or did half of all democracies evolve because of the internet?

I am pretty positive it is a coincidence. I am not even convinced yet that even one of the twitter revolutions in the ME will succeed. The internet can be turned off. And guns are still more powerful than butter.

The communication revolution is a powerful thing. Look homeward at the TEA Party. When like minded people can share their thoughts, a synergy is created.

If enough like minded people share their thoughts, critical mass is reached. When individuals are told that their natural yearnings are unnatural, as individuals, they may buy it. As on of millions who share the same yearnings, and share the same communication spaces, they will more probably question the intelligencia.

There is nothing more powerful than an idea whose time has come.