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US wage earners make less now than 10 years ago

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US wage earners make less now than 10 years ago

Unread postby Sixstrings » Sat 12 Sep 2009, 17:46:20

For the first time since the great depression (and possibly even then), US wage earners suffered through A Decade With No Income Gains.

The typical American household made less money last year than the typical household made a full decade ago.

To me, that’s the big news from the Census Bureau’s annual report on income, poverty and health insurance, which was released this morning. Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.

In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise. (The previous record was seven years, ending in 1985.) Other Census data [Historical Income Tables] suggest that it also never happened between the late 1940s and the late 1960s. So it doesn’t seem to have happened since at least the 1930s.

Given that we are likely to have Structurally High Unemployment For A Decade, this trend of stagnant or falling wages can last much longer than most realize.

Here's something to think about: If the housing boom from 2000 to 2007 produced no sustainable wage increases (if indeed any wage increases at all) what will? After pondering that, think about where home prices are going with poor wage potential and tightened lending standards.

Indeed what does this trend say about price pressures in general? link

Wow, that's quite an achievement. For as long as the census bureau has been tracking wages, the American worker has never been as bad off as the last ten years. And as Mish ominously points out, if the last few bubbles did nothing to bring wages up, then nothing will. The bottom line here is no matter what job you do, there will always be a Chinese, Indian, Ecuadoran, or Mexican who can do that job cheaper.

We're only holding on as much as we are due to our "service" economy, wherein foreign labor can't physically be here to take those service jobs. But even those service jobs are going.. anything that can be done over the phone is being transfered to Inida.. and as telecommuting technology develops, more and more jobs will head overseas (Indians speak English and work cheap.. the Chinese are also rapidly catching up in English fluency).

And if that weren't bad enough, we've got a southern border wide open to all of central and south america. Oh, and let's not forget the open floodgates of the H1B visas. It's almost as if someone is determined to destroy the American economy, whether through shipping the jobs out or shipping the low wage foreign workers in.
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Re: US wage earners make less now than 10 years ago

Unread postby VZR1800 » Sat 12 Sep 2009, 18:27:15

Lets see. 1999, working at Northrup Grumman on the B2 Stealth Bomber program, making $24.98 an hour. Got axed in Nov. 1999 due to end of construction and modification programs.

My wife also worked there and was making near $15.00 an hour.

Where are we today? I am unemployed, making the equivalent of $10.00 per hour on bennies. My wife has a job making $16.00 per hour.

So she is actually ahead of the game, although adjusted for inflation probably not. And I am way behind the eight-ball. Best I have seen since 1999 is $15.66 per hour just before I got layed off in January.

In our case the story is correct. Although I must add that we have played it cool, and are not in over-our-heads in debt. House payment of $750.00 per month. Thats all folks. So we are doing real good considering the circumstances. Two old cars, paid for long ago. Two 2006 motorcycles paid for in cash in 2006. No credit cards, no appliance payments, nothing.

Goes to show what living within your means can do for you.
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Re: US wage earners make less now than 10 years ago

Unread postby Novus » Sat 12 Sep 2009, 20:34:05

Sixstrings wrote:For as long as the census bureau has been tracking wages, the American worker has never been as bad off as the last ten years. And as Mish ominously points out, if the last few bubbles did nothing to bring wages up, then nothing will.


Bubbles don't create wealth or make the worker better off. Bubbles are created by the monied elite to transfer existing wealth from the middle and working classes to the mega rich upper classes. The Middle class may have got hosed in the last ten years but look at how many wall street billionaires those bubbles have created. In 1998 or so there were only a handful of individuals and families worth more than $1 billion. Now there are hundreds of newly minted billionaire robber barons. Wake up people the US has been hijacked by these crooks who sold your future down the toilet.

In the most prosperous decades of the 1950s and 60s the rich were taxed at 90% and those taxes paid for the American Dream and put a man on the moon. In 1955 college cost $400 a year. Powerful unions used their collective bargaining to insure the American worker got a living wage and health insurance. WTF happened. People need to wake up and stop pandering to the rich.
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Re: US wage earners make less now than 10 years ago

Unread postby JJ » Sat 12 Sep 2009, 20:45:49

I feel lucky.

Ten years ago, 800. a month plus rent in a one bedroom apartment at the sawmill, seven days a week with no overtime or benefits. We paid the bills. 105 degress choking on sawdust every day.

Today, produce department of grocery store. 26,000 a year. Three weeks paid vacation, one week personal time, five days legal holiday. Half a million life insurance. Full vision, dental, and family health plan, BCBS. Was United Health Care. Insurance paid 249,000. for my brain surgery, 50,000 for multiple surgeries on my 25 year olds leg in high school (the school insurance, which said they would pay everything, paid 46.00) (He broke it in nine places playing basketball). Paid 100% childbirth. My total deductable was 100.00 for everything. and so forth....

of course, this too shall end. The good news is my filipina wife has saved everything we have ever had since we got married 16 years ago and is peakoil aware and as ready as anyone can be, I suppose. And she is quite used to ironing with a coal filled iron or washing clothes on a rock (although she doesn't look forward to it).

edited for spelling
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Re: US wage earners make less now than 10 years ago

Unread postby VZR1800 » Sat 12 Sep 2009, 21:25:40

JJ wrote:And she is quite used to ironing with a coal filled iron or washing clothes on a rock (although she doesn't look forward to it).


Hmmm, Wilma, wheres my dinner? :mrgreen:
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Re: US wage earners make less now than 10 years ago

Unread postby SeaGypsy » Sat 12 Sep 2009, 21:37:43

1999 $300AUD an hour blowing Venetian glass.
(art glass has rapidly become Chinese factory dominated since then plus my father and 2 of our staff died from heavy metal poisoning in the hot glass industry)
Today $20 an hour in aged care work. (plus penalty rates)
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Re: US wage earners make less now than 10 years ago

Unread postby Sixstrings » Sun 13 Sep 2009, 00:23:03

Novus wrote:In 1998 or so there were only a handful of individuals and families worth more than $1 billion. Now there are hundreds of newly minted billionaire robber barons. Wake up people the US has been hijacked by these crooks who sold your future down the toilet.


What I don't understand is, not since Ross Perot days has anyone even cared about this.. heck, I remember old Perot and Al Gore debating NAFTA. Ross warned us about the great "sucking sound" of jobs that would leave this country, but Gore mouthed on about the trickle-down prosperity globalism would bring, and somehow the American people believed him.

Turns out old Ross was right. That was our last chance to stem the tide of globalism, I think. A lot of people were fired up back then, a lot but just not enough. And now, even with history having undeniably rendered it's verdict on all the old debates, people are more clueless than ever.

It'll never happen, but we really need to close off our borders while we at least still have agricultural production in our favor. Currently, China is busy buying up farmland the world over. At the rate we're headed, I wouldn't be surprised if one day China starts buying up American agriculture too. It's happened before, you know. The Irish potato famine wouldn't have been nearly as bad if not for the fact that English landowners exported food out of Ireland, leaving the Irish to starve to death.
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Re: US wage earners make less now than 10 years ago

Unread postby Fiddlerdave » Sun 13 Sep 2009, 01:20:15

The working class gets the glorious opportunity to demonstrate the frugality required to repair everything from the excesses and waste that the wealthy have imposed upon the economy in their long party.......

Lucky, lucky us! :(
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Re: US wage earners make less now than 10 years ago

Unread postby JJ » Sun 13 Sep 2009, 05:23:53

VZR1800 wrote:
JJ wrote:And she is quite used to ironing with a coal filled iron or washing clothes on a rock (although she doesn't look forward to it).
Hmmm, Wilma, wheres my dinner? :mrgreen:

actually, Bing wears the pants in our house. (Whatever I make I give to Bing. Whatever she makes, she keeps). I don't drink drug or smoke (I do grow flowers). So the only time I spend money (usually) is to buy a flower. I sold all my bikes when we moved to Texas (about twenty bikes). That was a mistake; Bing misses them. But fifty of us rode together; 46 have lost limbs or otherwise suffered life-threatening injuries. I kinda see it as a survival imperative. Then I have some residual slowness due to a month long aneurysm induced coma I was in. Everything takes a little longer.

ps. Life Lesson: if you complain about the food, you WILL become the cook.
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Re: US wage earners make less now than 10 years ago

Unread postby Heineken » Sun 13 Sep 2009, 07:58:15

Ultimately wages, like the rest of the economy, are based on the resource base and the number of two-legged monsters picking away at it. So as population rises and resources shrink, lower living standards and wages are inevitable.

Gawd, the concept is so simple. But a key word in the above is "ultimately." The general relationship is easily masked by relatively short-term trends and events.
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Re: US wage earners make less now than 10 years ago

Unread postby MarkJ » Sun 13 Sep 2009, 08:33:21

Some of my tenants are lucky to make half of what they made 10 years ago, plus many of their rents have more than doubled.

Overall, their net household expenses aren't that much higher since many now receive rent subsidies, WIC, food stamps, food-bank supplements, medicaid, child care, HEAP, Emergency HEAP, transportation assistance etc.

Many local wages really weren't that much higher, but many jobs were steady, offered plenty of overtime and it was much easier to find a steady full-time and steady year-round second job.

Currently, many people have to work 2 or three jobs to get 40 plus hours of work. In addition, many jobs are low paying part-time, temporary or seasonal jobs which require traveling great distances between different part-time jobs in different regions.

Fuel costs, plus vehicle maintenance, repairs and replacement due to wear and tear eat up much of the $8 per hour part-time paychecks.
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Re: US wage earners make less now than 10 years ago

Unread postby Cloud9 » Sun 13 Sep 2009, 09:20:26

I bet the downward spiral of wages does not affect government workers.
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Re: US wage earners make less now than 10 years ago

Unread postby dsula » Sun 13 Sep 2009, 11:34:19

Sixstrings wrote:Oh, and let's not forget the open floodgates of the H1B visas.


I've been looking for a knowledgable electronic desing engineer for over a year now and haven't found anybody suitable. What choice do I have than bring somebody in from abroad? Seems the only thing taught at US universities is law, art or banking. All useless crap of no true value. Where are the engineers that create stuff?

Actually you should be thankful for the H1B program. At least somebody educated is moving to the US. That's badly needed to balance the scores of mexicans who just know enough to spell their names or the flood of somali refugees who don't even know that much.
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Re: US wage earners make less now than 10 years ago

Unread postby Troyboy1208 » Sun 13 Sep 2009, 11:48:32

Cloud9 wrote:I bet the downward spiral of wages does not affect government workers.


As a teacher I can positively say that my wage has gone up substantially since 1999. In 1998 when I first started working as a teacher my check was 840.00 every two weeks. Now its around 1400 every two weeks. But florida still ranks pretty low nationwide
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Re: US wage earners make less now than 10 years ago

Unread postby ian807 » Sun 13 Sep 2009, 12:05:13

Real wages have stagnated since the 70s ended and the conservatives (i.e. financial oligarchs via K-Street proxies) bought the election, the white house, and the republican wing of the congress.

After all, the middle class is troublesome, demanding and worse, expensive. Brazil doesn't have much of a middle class. Neither does Mexico. They're not revolting in those countries, so let's phase out those pesky folks in the middle, eh?

Not that the democratic Clintons, who delivered us from Glass-Steagal were any better. Carter was the last president who was actually a president. He spoke truth, owed the wealthy nothing, and kowtowed to nobody. Naturally he was reviled.
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Re: US wage earners make less now than 10 years ago

Unread postby Auntie_Cipation » Sun 13 Sep 2009, 12:11:54

JJ wrote:ironing with a coal filled iron

What's an iron? :P

Seriously, in 1999: income in the low $40,000s, full benefits, health insurance, lots of holidays/personal time etc.

2009: I just quit two part-time jobs (one 10 hrs/week paying $12.50/hr, the other 18 hrs/week paying under $12/hr, zero benefits, zero health insurance, zero paid time off) to move to a homestead living situation where I will try my hand at freelance copyediting/proofreading work.

However, even though the part time 2009 jobs didn't add up economically to the fulltime 1999 job, my mind rests easier -- I quit that job voluntarily, couldn't handle the socio-ethical internal conflicts (yes, it was a government job).
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Re: US wage earners make less now than 10 years ago

Unread postby MarkJ » Sun 13 Sep 2009, 12:29:39

Our hourly rates, service rates, installation charges, same day service rates and emergency service/installation rates are about 50% higher than 10 years ago, although some flat rate charges have doubled. Parts-Markup hasn't increased as much since rising prices on some items doesn't leave much room for markup on top of labor, service charges and other fees.

I've doubled many of my residential/commercial rents and leases in the last ten years as well.

Some of my tenants that have complained about rent increases suffered from extreme sticker shock when pricing comparable rentals in the region since they've been locked in a low-rent time warp for several years.

Many people have a strange concept of time as well. They talk about good jobs, low rents and dirt cheap acreage, building lots, commercial properties and decent housing like it was yesterday, not 10 plus years ago.
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Re: US wage earners make less now than 10 years ago

Unread postby Auntie_Cipation » Sun 13 Sep 2009, 13:23:18

MarkJ wrote:I've doubled many of my residential/commercial rents and leases in the last ten years as well.

I would've expected rents to rise while real estate prices were rising, and then to continue rising (or remain steady) while real estate peaked and began dropping, but within 2-3 years of real estate starting to decline I would have expected rents to start dropping as well (as good tenants become harder to find due to more affordable purchase prices). Maybe because of the credit crunch people can not afford to switch from renting to buying on the lowered costs alone -- they are still having trouble getting mortgages.

Comments, Mark? What have you seen along these lines in your area (if I recall you're in a wealthy area, but you must have an idea of how the market is going in the broader region in this regard)?
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Re: US wage earners make less now than 10 years ago

Unread postby The_Toecutter » Sun 13 Sep 2009, 15:04:21

Heineken wrote:Ultimately wages, like the rest of the economy, are based on the resource base and the number of two-legged monsters picking away at it. So as population rises and resources shrink, lower living standards and wages are inevitable.

Gawd, the concept is so simple. But a key word in the above is "ultimately." The general relationship is easily masked by relatively short-term trends and events.


While all the above you have said is true, the problem you describe will manifest itself regardless of resource constraints when just one percent of said two-legged monsters own 40% of the wealth and account for one-third of the resource consumption on this Earth. Even if everyone else lives a subsitence lifestyle, so long as the super-rich don't reduce their consumption to a meaningful degree, we will still eventually be left without a viable planet to live on.

The super-rich consume more than the bottom nine-tenths of the world's population, that nine-tenths which still includes roughly half of the world's middle class.

dsula wrote:I've been looking for a knowledgable electronic desing engineer for over a year now and haven't found anybody suitable. What choice do I have than bring somebody in from abroad? Seems the only thing taught at US universities is law, art or banking. All useless crap of no true value. Where are the engineers that create stuff?


There are plenty of entry level engineers just out of school looking for work but they can't find jobs because companies tend to be too demanding of experience(asking for 5+ years and/or PE certification tends to be the norm). If they want engineers so badly, they should take the short term losses to train them so that they will have a dedicated employee in the future.

I'm an electrical engineer myself. Despite the shortage, myself and those whom I graduated with still had much difficulty finding employment due to companies demanding candidates with unrealistically high amounts of experience; these companies were not willing to make any exceptions(even to interns who had worked for them mere months before). It took me a year to find employment.

I'm not saying that the above practice common to corporations in the U.S. applies to your particular case, but it might...
The unnecessary felling of a tree, perhaps the old growth of centuries, seems to me a crime little short of murder. ~Thomas Jefferson
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Re: US wage earners make less now than 10 years ago

Unread postby Tyler_JC » Sun 13 Sep 2009, 17:33:42

But employees have little loyalty these days. If you spend thousands of dollars training them and they disappear the minute they have their certifications, where does that leave the employer?

It makes more sense to outsource the cost of training to someone else and then select from the best.

The problem works both ways.
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