Wages compared to 30 years ago

[Cattlegod]

side effect of a global economy.

 

[jackace]

Originally posted by: Cattlegod
side effect of a global economy.

See that's my problem with the whole thing. If we wanted to institute a global market why didn't we do it in a manner that allowed other countries to catch up to us instead of us going down to meet them? My only explanation is our politicians have sold us out to the rich who control these international corporations. The current system does not preserve our standard of living, it just allows the rich corporations to benefit from cheaper labor.

 

[jackace]

"In addition, corporate profits are growing more quickly than wages and salaries. Employee pay now makes up the lowest share of the nation's gross domestic product since the government began recording the data in 1947, according to the paper, while corporate profits have climbed to their highest share since the 1960s."

http://money.cnn.com/2006/08/2...y/real_wages/index.htm

edit- I'm not going to argue against the fact that America is still one of the best places in the country to start a business, but it is quickly turning into a bad place to be an employee. (from an economic POV) This leads to many problems in society.

 

[dmcowen674]

Originally posted by: jackace

Originally posted by: Cattlegod
side effect of a global economy.

See that's my problem with the whole thing.

If we wanted to institute a global market why didn't we do it in a manner that allowed other countries to catch up to us instead of us going down to meet them?

My only explanation is our politicians have sold us out to the rich who control these international corporations.

The current system does not preserve our standard of living, it just allows the rich corporations to benefit from cheaper labor.

Originally posted by: jackace
"In addition, corporate profits are growing more quickly than wages and salaries.

Employee pay now makes up the lowest share of the nation's gross domestic product since the government began recording the data in 1947, according to the paper, while corporate profits have climbed to their highest share since the 1960s."

http://money.cnn.com/2006/08/2...y/real_wages/index.htm

edit- I'm not going to argue against the fact that America is still one of the best places in the country to start a business, but it is quickly turning into a bad place to be an employee. (from an economic POV)

This leads to many problems in society.

You are relatively new to P&N but you are bringing tears to my eyes.

Thank you whoever you are. :thumbsup:

 

[GrGr]

Jackace wrote:

If we wanted to institute a global market why didn't we do it in a manner that allowed other countries to catch up to us instead of us going down to meet them?


Because while only 3 % of the worlds population the US consumes 25 % of it's resources. This is an impossible equation and the inevitable end result is that the US will have to cut down on it's overconsumption. It is not a question of if it will happen but how it will happen.

The way things are setup now we know who the winners among the American people will be. The top 5 % that are already cutting itself off from the rest of America.

 

[blackangst1]

Originally posted by: dmcowen674

Originally posted by: Stunt
Jackace, I agree with your math...except your incomes are off;here your 2004 income is off.

Median income was $11,197 in 1974, and $44,334 in 2004.
This means 31% in 1974, 35% in 2004.

Keep in mind that 2004 was the peak of a housing bubble and right after a recession (incomes lagged, housing prices accelerated). Also, a mere 6 years later and the interest rates were 15%; same math in 1980 it's 55% of people's incomes (based on $17,700 income, 15% interest, $64,600 avg. house cost); much much higher than 1974/2004.

Needless to say, housing prices haven't inflated faster than incomes.

Originally posted by: jackace
Here is a look at rental costs. As you can see they are adjusted for inflation and 2000 is still higher then any of the previous years. You will also notice that the change from 1990-2000 was not very much. The reason....interests rates had changed and it was now affordable to buy again.

http://www.census.gov/hhes/www...storic/grossrents.html

Basically other then factoring in the HIGHLY inflated interest rates of 1979-1985 housing costs have been going up as a percentage of median income and not down as you claim stunt.

Originally posted by: Jhhnn
Please, Stunt, your desperation is showing.

Housing prices have obviously gone up much faster than wages, particularly in the last 7-8 years. And what people are paying on their mortgage on average doesn't reflect what it costs to buy today.

I was an adult during the whole time in question. My ex-wife and I looked at housing in 1976- 1920's vintage 3 bedroom brick bungalows in SE Denver were going for ~$40K, I was making the princely sum of $6.34/hr. Guys with the same job classification in my company now make $20/hr, but the same bungalows sell for over $250K... Back then, healthcare was paid by our employer, but today we each put in $300/mo out of our pockets, for reduced benefits, to boot...

And the very high interest rates of the early 80's were temporary, everybody knew it, and prices were correspondingly depressed. Opportunities to refinance came up, and were quickly taken advantage of. Exactly the opposite situation exists today, with interest rates still quite low and prices outrageously high. Chances for today's prices to hold and today's buyers to refinance advantageously down the road are virtually non-existent, and that's obvious to even the least savvy among us. It'll take many years for such buyers to develop any equity at all in a falling market... not to mention those caught in the creative financing scams that have become so prevalent over the last several years.

Much of the so-called "growth" in GDP over the last several years is the result of mortgage refinancing at lower rates, and an upturn in consumer spending as a result. Lots of those folks have done so to pay off other debt as well, or to allow purchases that otherwise wouldn't have been possible. Yeh, sure, it looks good, and some people did so wisely, but they're the exception rather than the rule. Unlike previous times, few of today's refi deals are for the balance outstanding, but rather for more, sometimes a lot more.

Basically, it often amounts to liquidating assets to have cash in hand, equity being an asset. Lots of people will shortly have negative equity as a result of that and unsustainable prices. What happens the next time the economy takes a nosedive, and there's no equity to cash in? Low rates won't mean much without equity to borrow against...

Multiple people showing hard data facts to a foriegner clearly showing how wrong he is yet he continues to stand by his wrong garbage and spew more.

Did he post why he posts false economic data for a country he is not even in and what is the agenda for doing so???

You post fasle economic data also so whats the big deal?

 

[LongTimePCUser]

Prof. John,
Do you know where we can find the median income after income tax numbers adjusted for inflation. Those are the dollars people actually were able to spend.

I think we might get some further hints in those numbers that could help answer your question.

Originally posted by: ProfJohn
link
Go to this link and you will that income peaked in 1973 for almost every age group.

What happened in that year that lead to the long slow decline of income?

 

[JD50]

Originally posted by: LongTimePCUser

Originally posted by: ProfJohn
link
Go to this link and you will that income peaked in 1973 for almost every age group.

What happened in that year that lead to the long slow decline of income?

Prof. John,
Do you know where we can find the median income after income tax numbers adjusted for inflation. Those are the dollars people actually were able to spend.

I think we might get some further hints in those numbers that could help answer your question.

Wow, good point, I hadn't thought of that.

 

[CaptnKirk]

Originally posted by: ProfJohn
link
Go to this link and you will that income peaked in 1973 for almost every age group.

What happened in that year that lead to the long slow decline of income?

Is this what you're looking for?

President Nixon imposed wage and price controls. The 90 day freeze was unprecedented in peacetime, but such drastic measures were thought necessary. Inflation had been raging, exceeding 6% briefly in 1970 and persisting above 4% in 1971. By the prevailing historical standards, such inflation rates were thought to be completely intolerable.

The 90 day freeze turned into nearly 1,000 days of measures known as Phases One, Two, Three, and Four. The initial attempt to dampen inflation by calming inflationary expectations was a monumental failure.

Almost 3 years of no wage increases for the general working American, but the Corporate wheels continued to get their bonus.
Gas prices went from around 35 cents a gallon up to a little under a do0llar, as the Vietnam War wound down,
but the decrease of consumption of the product by the military machine was met by phony shortages at the pump to make
sure that the oil companies made as much money, if not more, than they made before the reduction of military consumption.

Impeachment of that bastard couldn't come fast enough, the son-of-a-bitch was a lying crook, and if you look around today
his behind the curtains machine is the driving force of the Bush Administration.
Same lying, coniving, deceitful people - any questions?


Oh, yeah, by the way I was there - just 5 years out of the service, and near the end of the 'Nam thing.
Working Aerospace Defense Industry. Wage freezes stuck employees at $ 4.25 an hour max for 3 years with no raises
while the cost of living and expenses nearly doubled during that time.
Increased fuel costs for transportation of goods were passed to the consumer for them to pay while not making a god damn dime more in wages until late 1976.

It was also the trigger of the colapse of the American Auto Industry, as the gas hog cars fell out of favor, the foriegn market
especially Honda and Datsun had cheap and economical cars ready for the US market, and Detroit's answer to the fuel problem
was to load the market with absolute garbage cars - Vegas, Pintos, Monzas, Mavricks - junk with a capital 'J'.

 

[ElFenix]

Originally posted by: Stunt
Considering inflation is 1-3% a year compounded annually, 12% isn't all that bad.
Inflation is typically measured with commonly bought items like food, clothing, etc. It doesn't take into account big ticket items which are much less expensive today than they were 30 years ago. Example: cars, house.

Today everyone can buy 2-3 cars and the vehicle represents about a third of their income; unheard of in the 70's. Housing while it has appreciated in value (expensive to buy, has still made people more wealthy) is much less to buy today. Consider the long term mortgage rates. Here is a chart showing the low interest rates compared to the 70's/80's. Compounding of these rates have a significant impact on how much people will pay for their house. A $250,000 house with a 5.5% rate will cost you $507,500 after all payments, but at a 13% rate, this balloons to $971,800.

it takes into account rents, which are probably easier to measure than house prices. and, in general, house monthly expenditures tends to be less expensive than rental rates for similar sized living quarters (and for even substantially larger houses). of course, it could also include rental houses.

Originally posted by: ProfJohn
Can anyone explain WHY this is happening?

increased utilization of women in the workforce. the rate of people joining the workforce due to the breakdown of glass ceilings is higher than the rate of increase in population and higher than the rate of increase in GDP.

that and the increase in the price of a barrel can explain tons of things.