Not Your Father's Pay: Why Wages Today Are Weaker By GREG IP American men in their 30s today are worse off than their fathers' generation, a reversal from just a decade ago, when sons generally were better off than their fathers, a new study finds. The study, the first in a series on economic mobility undertaken by several prominent think tanks, also says the typical American family's income has lagged far behind productivity growth since 2000, a departure from most of the post-World War II period. The findings suggest "the up escalator that has historically ensured that each generation would do better than the last may not be working very well," says the study, which is scheduled for release today. The study was written principally by John Morton of the Pew Charitable Trusts, which is leading the series, called the Economic Mobility Project, and Isabel Sawhill of the Brookings Institution. Other participating think tanks are the Heritage Foundation, American Enterprise Institute and the Urban Institute. (See the study.1) In 2004, the median income for a man in his 30s, a good predictor of his lifetime earnings, was $35,010, the study says, 12% less than for men in their 30s in 1974 -- their fathers' generation -- adjusted for inflation. A decade ago, median income for men in their 30s was $32,901, 5% higher than 30 years earlier. Ms. Sawhill said she isn't sure why men's wages have stagnated. "It seems there's been some slowdown in economic growth, it's possible that the movement of women into the labor force has affected male earnings, and it's possible that men are not working as hard as they used to." The study suggests that absolute mobility -- the rate at which an entire generation's lot improves relative to previous generations -- has declined. But within a particular generation, individuals can still get ahead if relative mobility, the rate at which the rich and poor trade places, remains high. Poor fathers may have rich sons, and vice versa. The report also found that between 1947 and 1974, productivity, or output per hour, and median family income, adjusted for inflation, both roughly doubled. Between 1974 and 2000, productivity rose 56% while income rose 29%. Between 2000 and 2005, productivity rose 16% while median income fell 2%, challenging "the notion that a rising tide will lift all boats," the report says. Ms. Sawhill said several factors could explain the divergence: a growing share of income going to the highest-paid workers, or to profits; an increased share of labor compensation going toward benefits such as health care; or a decline in the number of wage earners in the typical family. http://online.wsj.com/public/articl...160-ffyvlR98p8u9Sorpc2R_TwOs50w_20070601.html
A barista at Starbucks wage typically isn't as high as that of a line worker at an engine assembly plant.
Once the unemployment runs out people get desparate. go and take a close look at the past BLS non farm payroll reports. A large % of the job growth is from government and service sector. A war, increasing bureaucracy and baristas. Welcome to the 21st century American style plutocracy.
prisons.. thats the future... go work for a prison. growth industry.. oh yeah.. and security.. go be a security specialist at an airport. GO USA !!!
http://www.scaa.org/about_usbc.asp It looks like Matt is pushing 30. Congratulations to our 2006 USBC Champion Matt Riddle, from Intelligentsia Coffee Roasters & Tea Blenders in Chicago, Illinois. Matt went on to represent the United States at the 7th Annual World Barista Championship, held in conjunction with the SCAE's World Specialty Coffee Conference, Exhibition & Workshops, May 19-21, 2006, in Berne, Switzerland. Matt placed THIRD at the 2006 WBC! -This is the BEST the US has ever placed at the WBC. The United States Barista Champion. Dare to dream.
The Commerce Secretary said we need more immigration because we don't have enough workers. In a strictly economic sense, he may be right. GDP can only grow at the rate of population growth plus productivity. But as Pat Buchanan has written, economic efficiency is not our Holy Grail. Other values are more important. As for these studies, it is dangerous to draw conclusions without understanding the details of the studies. I doubt for example that the demographic breakdown of the current sample matches that of "their fathers." We know our country is quickly becoming less white and european and more minority and hispanic. There may also be issues in the periods being compared. Are they truly comparable or did the studies compare a period of historic growth with a more typical period?
No doubt in my mind the study reflects reality. compare women in high paying jobs then and now. The lower relative pay is a function supply and demand. The supply of potentially good workers has gone up dramatically. The pie may be a little larger but it has to be sliced into many more pieces. I have written and spoken about this since I realized how much tougher it was to get in to schools compared to when my Dad was applying. Not long ago every guy with good grades got into a top school and every guy with degree had a good job in America. Please do not come back and tell me I must be some sort of misogynist. I think women have every right to compete. I am just stating facts.