Things Changed in 1971

[odanny]

Does anyone have any insight into why these changes started 50 years ago?

I've posted a link at the bottom:

WTF Happened In 1971?

"I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop." - F.A. Hayek 1984

wtfhappenedin1971.com

 

[Otis Mayfield]

Yes.

Germany and Japan and to a lesser extent Britain were destroyed during WWII. America was the only industrialized country with an intact infrastructure.

Times were really good in the 50s and 60s. Wages were outstanding.

Then Germany and Japan rebuilt. Suddenly there was competition.

 

[Votto]

You can thank Nixon

Nixon Ends Convertibility of U.S. Dollars to Gold and Announces Wage/Price Controls

Explore the Federal Reserve's history

www.federalreservehistory.org

 

[Orangecat]

Compensation didn't go down in 1971, the dollar lost its value.

 

[toobfreak]

Does anyone have any insight into why these changes started 50 years ago?

Probably has to do with foreign labor competition. We started having significant foreign labor competing about that time and wages were frozen here to keep companies here cost competitive.

All I know is that to make the equivalent of minimum wage today compared to the late 70s, you have to earn at least $13/hr today to have the same buying power today as we had earning minimum wage in 1977-1979.

So if an employer offers you less than $13 now, you are working at BELOW the minimum wage in the late 70s. Which also means if you are earning $15/hr now, you are only earning $2 over minimum what you got back then. Which means you ain't earning squat today unless you are making $45/hr, which is why today, it take BOTH parents working just to stay above water.

 

[TroglocratsRdumb]

Automation

 

[odanny]

So if an employer offers you less than $13 now, you are working at BELOW the minimum wage in the late 70s. Which also means if you are earning $15/hr now, you are only earning $2 over minimum what you got back then. Which means you ain't earning squat today unless you are making $45/hr, which is why today, it take BOTH parents working just to stay above water.

When I started with my employer in 1994, I was making $16.20 an hour to start. And things changed dramatically in 1998. By 2000, new employees were making around $8.50 an hour, and today are making only a little above $15.00 an hour. They call these "competitive wages" or "two-tier wages".

You have to take a calculated risk early in life, do I go in debt to get a college degree and hope I earn enough to get out of the hole I dug? What's sad about this ridiculous cost of an education is the 7% interest your student debt accrues. Take out too much in loans and you'll spend the rest of your life just paying the interest on it.

 

[DGS49]

FWIW, tying wages to productivity is not appropriate. Most improvements in productivity are the result of capital investment and advanced technolgy.

For an irritating example, fifty years ago if you worked in customer service you spent half your time resolving bullshit issues that the customer could handle himself. Now the customer is forced to go through a daisy chain of options that eliminate the simple problems - resolving them with no human involvement - and the customer service rep can satisfy five times as many customers in the same work shift. Only 20% of them actually need to talk to a human - despite what they think.

The machines that landscapers use now are twice as productive as in 1970, but the landscapers aren't working any harder.

 

[toobfreak]

You have to take a calculated risk early in life, do I go in debt to get a college degree and hope I earn enough to get out of the hole I dug?

No one should have to make that guess. Getting educated shouldn't be a "risk." And educations shouldn't be for just the lucky or affluent. That is the problem with everything.

What's sad about this ridiculous cost of an education is the 7% interest your student debt accrues. Take out too much in loans and you'll spend the rest of your life just paying the interest on it.

Meantime, the university is rolling in dough and the heads of it are making fabulous 6 figure incomes. Something wrong with that picture.