Real wages the same in U.S since 1983?
 

Former Australian PM said today that real wages in the U.S. has not risen since 1983. He was railing against the weakening of union power in Australia and he provided the U.S. as an example. Is this true?

Since I was a "broke as heck" college student in '83, I can assure you that my real wages have risen :)

I have gone fron 15 cent beers in college to good beer today:D

In 1983 I earned X, and gasoline was about $1.00/gallon, In 2007, I earn 6X and gasoline is $3.50/gallon, I'm probably doing better. Although at the end of the month, I still don't have a lot left over that I'm splurging with. However, now I put more in retirement in a year than I earned in a year back then.

I guess he was saying that after taking inflation into account, wages have not actually risen.

Not to pick on you specifically, but quoting to make an observation.

Although you are doing better, I would bet that Porsche owners are not the majority statistic in America. How many "Joe 6-pack" types can say that their buying power has increased?

Saw an old bank statement from the 1980's and it was a list of $10 and $20 withrawls.

If fast food is used for the consumer price index, burger combination meals were $2.00 back then.
If gasoline under President Bush's regime is used.........

I am now "Joe 12-pack" thank you very much :) ...but it hangs around in the frig a bit longer than way back when.

It is political grandstanding with incorrect information. Imagine that.

Most Americans spend whatever they earn. While maybe the statistics show a house payment and two cars in the driveway for both 1983 and today, the average size of a house has grown substantially.

The average house built in the 1950's was 1100 square feet. Today it's over 2200.

Why does it take two incomes just to "get by" these days? Because we are far more affluent than ever before.

Almost all people in America below the poverty line have color TV. Most own cars.

People who think actual buying power has stagnated do not realize how much the "normal" or "average" lifestyle has changed.

Haven't seen any hard numbers on this but if an opinion counts for anything (probably not) I'd suspect that "real dollar" wages have in fact risen - although not nearly as much as one would think. I also agree with Dantilla. Most people in this country seem absolutely hell-bent on consuming anything and everything they can get their hands on. Savings and investing are foreign concepts to most people.

Some statistics I HAVE seen hard numbers on are (1) rates of personal savings (lowest in history), (2) household debt (both $ and % of gross income, also highest in history), (3) housing prices (highest in history, although starting to collapse.

I suspect a fair hypothesis at this point would be "Americans earn more than ever before, spend more than ever before, and own less than ever before". Banks own most of everything out there - not individuals. The notion of an "ownership society" in this country is misleading at best, a calculated sham at worst.

Some stats I'd LOVE to see:

1. What's the average amount of equity (both in $ and % of gross household income) that people have in their homes? The one we're constantly fed is "look at how many people own their homes", which is ridiculous - the banks own the homes, not the people.

2. What's the real dollar portion of household income that goes to taxes and other government services - plotted over time for the last 100-or-so years. I'd suspect it's higher than ever before when one considers taxes, fees, surcharges, etc. I'd also be interesting to see today's # (whatever it is) compared to several foreign countries. I suspect the results would be a bit shocking to some.

3. % of household income spent on "necessities" like housing, clothing, food, transportation, etc.

4. What are the exact numbers regarding worker productivity, numbers of hours worked per week and raw numbers of days off per worker per year over the past 100-or-so years (we keep hearing reports of "productivity is up" but simultaneously hear that "people are trying harder than ever before to balance work/family life. . . I'd like to know which one is correct).

Knowing those (and a few others) would help to prove (or perhaps disprove) my hypothesis that America is all about consumption by people that are on "financial treadmills" - in a frenzy of consumerism but never really "owning" much at all.

So what happened in 1983 to start the trend?

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Makes sense. You can probably thank Ronnie Raygun for that fine example of responsible financial policy.

We can always just follow the example of government and pass the problem to our kids and go take another vacation to Hawaii - on our HELOCs, of course.

Yep, that's the key point. Dollars and inflation is meaningless, as is, to an extent, consumer debt. Economists talk about "utility" and that's the bottom line.

Don't pick off a couple of sound bites like POP did. You can find an example of anything if you try hard enough. But Americans have never lived better and had more from less than they do now. More debt? People have more debt because they can. Markets have evolved immeasurably since the '70s when Dad had his BankAmericard or whatever. And his 10% mortgage.

Yet has the lifestyle change been facilitated by a massive increase in debt as the graph shows? Its a problem down here to with many folks living on the 'never never' so to speak. The great fear is that if home mortgage interest rates rise, there will be a lot of people standing on the corner singing for their suppers.

And perhaps they should be.

I must've missed the part where the gun was held to their heads when they signed that 50+ pages of paperwork.

Ronnie was a popular guy with the media, but he might be the most overrated president in history. He created a mountain of debt and made an arms for hostages deal with those badass Iranians; his 80s tenure saw the escalation of college tuitions out of sight and the birth of "political correctness" --with the help of Nancy and the Democrats. The power of labor unions was diminished and corporations started firing people as a way to improve their bottom line and raise their stock price. The result was a harsher environment for workers. How do I know? I know.

Tipper Gore also had a big hand in the promulgation of political correctness with her "warning labels on music" campaign. The guilt is on all sides and (IMHO) a fault of our parent's generation as a whole rather than a particular party within it.

Don't forget Wal-mart, Nike, Japan, China, Sarbanes-Oxley, Alan Greenspan, Enron, Exxon, Haliburton. It's a conspiracy, you know. Of course you know.

some good reading here.


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