Stagnant wages & increasing inequality in America (Kevin Drum)

Two recent items by Kevin Drum (in his Washington Monthly blog) that, in combination, bring together a lot of information very compactly and offer useful food for thought. Some highlights (with my bolding):

First the good news: women have made steady increases — though it's worth noting that about half of that gain is because women work more hours than they did 30 years ago. On an hourly basis, the increase since then amounts to about 1% per year.
And men? Not such good news. The average 40-year-old guy made $44,000 in 1973, and that was as good as it ever got. Today that number is about $40,000. It's gone down even though the American economy has nearly doubled on a per-person basis during that time.

The rest is below.

--Jeff Weintraub
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May 26, 2006
WAGE GROWTH IN AMERICA....Brad DeLong has a nice, readable introduction to income and wage trends over at his place that's worth a look. At MaxSpeak, Max Sawicky comments that "I don't envy the politician trying to explain it in less space," while the Sandwichman wonders if the tiny growth in wages over the past few decades is even tinier than it looks because some of it is due to the fact that the average worker is older now, and older workers get paid more regardless of whether average wages are going up.

Well, here's a single data point that addresses both questions. It's a chart that shows median income for 35-44 year old men and women since the end of World War II.

First the good news: women have made steady increases — though it's worth noting that about half of that gain is because women work more hours than they did 30 years ago. On an hourly basis, the increase since then amounts to about 1% per year.

And men? Not such good news. The average 40-year-old guy made $44,000 in 1973, and that was as good as it ever got. Today that number is about $40,000. It's gone down even though the American economy has nearly doubled on a per-person basis during that time.

So where did all the money go? What happened in 1973 that suddenly stopped wage growth for half the population in its tracks? And what should we do about it?
—Kevin Drum 6:01 PM Permalink | Trackbacks
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[JW: What happened? Part of the answer is ...]

July 11, 2006
KILLING UNIONS....As American manufacturing has declined over the past few decades, so have the old-line labor unions that represent manufacturing workers. That dynamic is pretty obvious.

But there's much more to labor's decline than just that. Successive administrations have systematically tipped the bureaucratic scales against labor unions, making it harder to form new unions, harder to join existing unions, and easier for management to harrass and fire union organizers. Nathan Newman writes today about a good example of how this works:
[....]
Everyone remembers Reagan firing the air traffic controllers, but for all its drama that didn't affect private sector unionization at all (and, in the end, didn't affect public sector unionization very much either). Successive NLRB rulings, however, have steadily chipped away at labor rights and helped companies like Wal-Mart remain happily union free. That's good for big corporations who contribute to the Republican Party, but not so good for middle class workers who no longer have anyone to fight for pay raises and better working conditions. The result is the three-decade wage stagnation illustrated in the chart above.

Read the rest of Nathan's post for more details on how this works. —Kevin Drum 12:16 PM Permalink | Trackbacks |