Tom Lindmark commented (in response to my post on private and government wages):
I thought the chart on total compensation was even more interesting.
I agree. This is not only more interesting, but unfortunately also more frightening.
Source: BEA
Update:
Reader Dan Buckstaff makes the keen observations that:
This appears to be some kind of nominal number, rather than real wages. There's no way that real wages gained that much per year in the 1970s. And the annual gain since 1980 reflects decreasing inflation.And he is absolutely correct (and I should have made that more clear). We have seen real declines of similar magnitude during the 1970's, but never in nominal terms. Below is a chart real wages over that same time frame.
Nonetheless, the recent plummet is alarming, especially relative to an indebted consumer.
The good news is that in real per capita terms, it doesn't look as bad. The bad news is that in a nation as indebted as the U.S., nominal is important. Not in terms of earnings power for new purchases, but to service existing debt loads.
to say the least. But Helicopter Ben in his acceptance speech on Mon was all over price stability. I'm glad my father isn't alive to see this. Cause it sure ain't my father's stock market.
ReplyDeleteHmm...who got elected in 1980?
ReplyDeleteok ..rant time...if these numbers are as bad as they look, then the economy has failed. We know the culprits, but quite frankly, when the economy fails, its not the criminals who need looking after..its the bottom quartile. So either America wants to revert back to slavery, economically if not literally, or we all pull together. This means, the government repossesing all vacant houses, bringing back all troops, extending food and health care to all that need it, for free. This is real, we need another answer, as this has failed. We do it on aplanned basis and create an environment of regeneration or we slump long term and abrogate the possibility of a future that resembles something we can aspire too. The picture you portray reveal the sophistry of a propaganda machine in DC that would put Goebbels to shame. Just saying.
ReplyDeleteor it's just a bad recession that will work out of over time... finally someone who's more bearish than i am!
ReplyDeleteThis appears to be some kind of nominal number, rather than real wages. There's no way that real wages gained that much per year in the 1970s. And the annual gain since 1980 reflects decreasing inflation.
ReplyDeleteNonetheless, the recent plummet is alarming, especially relative to an indebted consumer.
I don't know why people refer to 'real' figures, when 'real' mean bases upon government published CPI numbers which are so distorted they are almost meaningless.
ReplyDeleteIt is interesting that almost every modification to the CPI calculation causes the figure to be reduced. Similarly with unemployment numbers.
I wonder if deflation really sets in if we see some methodology changes to CPI that make the numbers bigger...