I stumbled across data series AHETPI, Average Hourly Earnings of Production and Nonsupervisory Employees, starting in 1964.
If this has anything like the usual quasi-exponential curve shape one expects with time series data, it is with an awfully small exponent. Of course, on some scale, a curve segment can look like a straight(ish) line, but that just reinforces the point.
Here it is on a log scale.
Clearly, there are two regimes with starkly different growth rates. The break point, of course is in the early 80's.
For perspective, I plotted this curve along with series A576RC1, that we examined yesterday. That series is total salary and wage disbursements for the population, while this one is certain employees per hour, so I used A576RC1 per capita. Then, to get them on a comparable scale, I divided AHETPI by 1000. After all that, the ordinate values don't mean anything; it's the shapes of the curves that we're comparing.
This is similar to the mean vs median income data we've looked at before, and shouldn't be a surprise.
Let's look at how AHETPI has been affected by inflation.
Wow! Somebody could write a book about this chart, and maybe somebody should. For now, I'll just make a few observations.
For wage earners, the post WW II golden age really was golden, as real hourly earnings increased dramatically, peaking in 1973.
Then, except for a slight recovery after the '74 recession, it was downhill for 2 decades.
The steepest slide came during the late 70's, when inflation was high, and wage and price controls capped earnings increases.
Even after inflation was conquered, real wages continued to slide through the mid 90's.
The mini golden age of Clinton's second term looks pretty darn good.
Since then, it's been basically flat, except for an unexpected jump up during the great recession.
I'm trying to rationalize the jump up. Two things I can think of that might be operating are a) the selective elimination of lower paying jobs, and b) temporary deflation during the crisis. I'd welcome critical evaluation of these ideas, and any other suggestions to help understand this.
Update:
There was a brief dive into deflation during the financial melt-down.
Update 2: Meanwhile, see what Art has been up to.
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2 comments:
"The steepest slide came during the late 70's, when inflation was high, and wage and price controls capped earnings increases."
and the media spoke of a "wage-price spiral", as if wages were the driving force.
(But I think wage & price controls were in the early '70s, under Nixon.)
Taking your third graph and looking at the ratio (blue line divided by red line) I see
1. subset wages falling relative to total, in the early 1960s.
2. Subset wages stable from the late 1960s to the early 1980s.
3. Decline from the early 1980s to 2000 (including the "macroeconomic miracle" years of the latter 1990s).
The decline your graphs show reminds me of Waldman's wage suppression idea that I looked at a while ago.
What are those two odd little spikes there in the early 1990s??
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