Economy

Wages Are Still Falling

JM Ashby
Written by JM Ashby

According to a new report released by the federal Bureau of Labor Statistics this morning, real average hourly earnings have continued to fall and, year over year, earnings fell by 0.2 percent between July 2017 and July 2018.

Moreover, the average work week has also increased, meaning people are working longer hours for even less money than before the GOP and Trump passed their corporate tax cuts.

Real average hourly earnings for all employees decreased 0.2 percent from July 2017 to July 2018. The decline in real average hourly earnings combined with the 0.3-percent increase in the average workweek resulted in a 0.1-percent increase in real average weekly earnings over this 12-month period.

For production and nonsupervisory employees, real average hourly earnings decreased 0.4 percent, seasonally adjusted, over the 12 months ending July 2018. The decline in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.1-percent decrease in real average weekly earnings over this 12-month period.

This is an average number so for some people the difference could obviously be quite significant.

Meanwhile, a new study from the Pew Research Center found that average Americans are earning about $22.65 per hour today but wages peaked in 1973 when average Americans earned about $23.68 adjusted for inflation.

In fact, the real average wage, which Pew defines as "the wage after accounting for inflation" has roughly the same purchasing power as it did 40 years ago. And while some workers have seen gains, most of the increases have gone to those who were already the highest-paid. [...]

"After adjusting for inflation, however, today's average hourly wage has just about the same purchasing power it did in 1978, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then," he wrote. "In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today."

For some workers, the reality is actually worse. Real wages among the lowest-paid quarter of workers have increased just 4.3% since 2000, while the top tenth of earners has seen an increase of 15.7% to $2,112 a week (compared to $26 each week for the bottom 10%).

In "real terms," this means wages actually peaked 8 years before the first of the dreaded and much-maligned "Millennials" were born in 1981. It means wages peaked 11 years before I was born.

For some workers, the reality is actually worse. Real wages among the lowest-paid quarter of workers have increased just 4.3% since 2000, while the top tenth of earners has seen an increase of 15.7% to $2,112 a week (compared to $26 each week for the bottom 10%).

  • Draxiar

    Alternatively…

    “[Elizabeth Warren] Instead of advocating for expensive new social programs like free college or health care, she’s introducing a bill Wednesday, the Accountable Capitalism Act, that would redistribute trillions of dollars from rich executives and shareholders to the middle class — without costing a dime.”

    https://www.vox.com/2018/8/15/17683022/elizabeth-warren-accountable-capitalism-corporations

    • It’s a great idea but doesn’t have a chance in hell of passing. It’s more about her getting out in front of the Democratic competition for the party’s 2020 nomination and setting the agenda. Smart move on her part.

      • Draxiar

        It may not have a chance right now and it may be an opportunity to get out in front. What I like to see is that she’s not acting powerless. She she’s not reacting to things she’s acting on things. Many in the party could do the same. And who knows, maybe this gets shelved for now but reemerges later.

  • muselet

    Wages Are Still Falling

    What a surprise.

    Not.

    I do wonder what it will take for Americans to realize they’re getting the short end of the stick and stop supporting policies—and politicians—that actively hurt them.

    –alopecia

    • JMAshby

      I used to wonder that, but I don’t anymore. The truth is white Republicans will gladly eat shit if people of color have to experience something worse.

      Some people know full well what the GOP’s game is but that’s fine because at least they’re deporting immigrants and eliminating fair housing policies.

      • muselet

        Agreed, most white Republicans are more than willing to take one for the team if that means those people are hurt worse. However, I was referring to Americans more generally.

        –alopecia

    • Draxiar
      • muselet

        Good on Elizabeth Warren. Her efforts are doomed, of course, and won’t even be debated in the current Congress.

        Still, it’s a good and necessary idea.

        –alopecia