I'm going to post a chart you've seen a million times before (the myth of wage stagnation)

[Recursion]

Last edited Mon Jul 20, 2015, 11:56 PM - Edit history (1)

We've all seen this. We've all noted the year in question, 1972 or so, and come up with various theories about what happened then to cause the decoupling.

Now look at another chart:



And I don't have pretty charts for the next bit, so you'll have to go to the census website here, and look at three spreadsheets:

Table P-36. Full-Time, Year-Round Workers by Median Income and Sex White

Table P-36. Full-Time, Year-Round Workers by Median Income and Sex Black

Table P-1. Total CPS Population and Per Capita Income Black

Now look at what that tells you (all dollar figures below are 2013 dollars):

In 1972, the median white male income was $54,368 and in 2013 it was $51,535, a decrease of 5%. The white male workforce increased from 36 million to 50 million in that period (39% increase), or from 17% of the population to 15% of the population.

In 1972, the median white female income was $30,734 and in 2013 it was $41,262, an increase of 34%. The white female workforce increased from 7 million to 41 million in that period (485% increase), or from 3% of the population to 13% of the population.

In 1972, the median black male income was $36,715 and in 2013 it was $41,555 (the highest it had ever been), an increase of 14%. The black male workforce increased from 3 million to 6 million in that period (100% increase), or from 1% of the population to 2% of the population.

In 1972, the median black female income was $26,292 and in 2013 it was $35,460, an increase of 35%. The black female workforce increased from 2 million to 6.7 million (235% increase), or from 1% of the population to 2% of the population.

I want you to really think about that. Before the early 1970s, the only group that was seeing their income increase was white males; the work white women and people of color did wasn't even counted as "wages" on this chart (the increases of over 100% didn't for the most part reflect people who had been idle at home suddenly "starting to work" but the work they were doing starting to be counted as "jobs&quot .

Lumberjack_jeff is right, and I was reading those wrong, sorry. The gains for women and minorities from 1955 to 1972 were similar to their gains from 1972 to 2013. The real jumps there seem to have been over the course of the 1960s (which also undercuts the idea that the workforce expanded in response to decreasing wages rather than the other way around). But the stagnation still has only hit white males, and women and minorities still have a lot of wage catching-up to do.

The narrative of stagnant wages is strictly a narrative of the white male subsection of the country. The narrative of a shared prosperity in the period before the Great Decoupling is a narrative of the white male subsection of the country. Those higher wages could be paid to white men in the 1950s and 1960s because they were not being paid to women and minorities.

This isn't the fault of marginal tax rates (though we should raise the wealthiest for budgetary and incentive reasons). This isn't the fault of trade (though we should buy less crap from China and India). The narrative of economic stagnation over the past 40 years is precisely the complaint of white men who have for the first time in the nation's history had to share economic growth with other groups. We still don't have shared prosperity (female median income is 80% of male median income; black median income is 72% of white median income), but we are closer to it now than we were before the alleged stagnation.

The past rarely was as it is remembered, and this is an important example of that. If I'm skeptical of old solutions it's because I'm looking at their track record. I don't think we know what a genuinely shared prosperity in the US would look like because it hasn't happened yet, and if we need a New New Deal to get there, it's going to have to be so fundamentally and structurally different than the original one, to avoid the great disparities listed above, as to be nearly unrecognizable.