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Real wages over the last 42 years


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#1 Ogaden

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Posted 19 November 2012 - 08:15 PM

According to the standard measure of inflation, wages have only increased slightly over the last 40 years, but if you use an alternative measure of inflation, they have actually stayed the same for the last 42 years, and minimum wages have declined by 25%.

http://www.shadowsta...tion_calculator

For instance the minimum wage in 1970 was $1.60, which in today's dollars is $9.79

The minimum wage today is $7.25, a decline of 25%

I have created this by combining the shadow stats inflation calculator with minimum wages and median wages by year from 1970 to today

The US kept minimum wages to about $9.50 in today's dollars until 1980, after which Reagan and his successors allowed inflation to reduce that to between $6.50 and $7.00 in today's dollars. Obama has been trying to bring that closer to $8.00. The minimum wage fell to it's lowest point in 2006 when the minimum wage was the equivalent of only $6.00. To bring it in line with the minimum wage in 1970, it should really be more like $10.


Sources
http://www.infopleas...a/A0774473.html
http://www.shadowsta...tion_calculator
http://www.davemanue...hold-income.php

Edited by Ogaden, 19 November 2012 - 08:17 PM.


#2 juslen

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Posted 19 November 2012 - 08:45 PM

According to the standard measure of inflation, wages have only increased slightly over the last 40 years, but if you use an alternative measure of inflation, they have actually stayed the same for the last 42 years, and minimum wages have declined by 25%.

http://www.shadowsta...tion_calculator

For instance the minimum wage in 1970 was $1.60, which in today's dollars is $9.79

The minimum wage today is $7.25, a decline of 25%

I have created this by combining the shadow stats inflation calculator with minimum wages and median wages by year from 1970 to today

The US kept minimum wages to about $9.50 in today's dollars until 1980, after which Reagan and his successors allowed inflation to reduce that to between $6.50 and $7.00 in today's dollars. Obama has been trying to bring that closer to $8.00. The minimum wage fell to it's lowest point in 2006 when the minimum wage was the equivalent of only $6.00. To bring it in line with the minimum wage in 1970, it should really be more like $10.


Sources
http://www.infopleas...a/A0774473.html
http://www.shadowsta...tion_calculator
http://www.davemanue...hold-income.php


Oh boy, you just unleashed the shadow stats. If you apply them to GDP growth, we are currently in a recession, there never was a recovery. That being said, increasing the minimum wage would only cause further price inflation on top of rising prices caused by monetary inflation. The price of goods and services would have to rise to offset the costs imposed upon businesses by raising the minimum wage. Since we live in a more competitive global economy, raising the minimum wage would simply result in businesses in the U.S being less competitive, outsourcing would increase and smaller businesses would struggle relative to their larger competitors if the cost of labor was increased.

#3 Ogaden

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Posted 19 November 2012 - 09:38 PM

To be honest I do believe shadow stats rather than the 'official' statistics.

Also by Shadow Stats the recovery has started, it just started a year later than it did officially.

#4 Bowwow

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Posted 19 November 2012 - 10:04 PM

To be honest I do believe shadow stats rather than the 'official' statistics.

Also by Shadow Stats the recovery has started, it just started a year later than it did officially.


What recovery?

#5 Ogaden

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Posted 20 November 2012 - 12:45 AM

What recovery?


What do you mean what recovery, the economy is rebuilding. The problem is it isn't hyperbole to say the 2007-2009 economic crisis was unprecedented in size and scope, it was a global catastrophe on a scale not seen in 70 years. We will be working our way out of the hole that created for a decade at least.

The problem is the economy did in fact slide into a double dip recession in 2010 due to the debt ceiling debacle (thanks Tea Party) it's just due to statistical voodoo it doesn't appear to have done so on official statistics.

Edited by Ogaden, 20 November 2012 - 12:46 AM.


#6 Ogaden

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Posted 20 November 2012 - 12:49 AM

Also juslen I would dispute the idea that raising the minimum wage would lead to more outsourcing, everything you pay minimum wage for that can be outsourced is already outsourced, you can't outsource someone making you a fresh sandwich, sweeping your street, or any of the other menial jobs that have to be done here in your community. It would cause 'wage inflation', but the income gap is so absurdly severe in America this would be a good thing.

#7 Bowwow

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Posted 20 November 2012 - 12:49 AM

The problem is the economy did in fact slide into a double dip recession in 2010 due to the debt ceiling debacle (thanks Tea Party) it's just due to statistical voodoo it doesn't appear to have done so on official statistics.


I think you misunderstand the Tea Party. We don't want the debt ceiling raised so the government will stop spending.

#8 Ogaden

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Posted 20 November 2012 - 12:52 AM

I think you misunderstand the Tea Party. We don't want the debt ceiling raised so the government will stop spending.


What a brilliant way to accomplish your goals, you folks deliberately sabotaged the emergency economic measures after a depression level economic collapse and actually managed to cause the US to get a downgraded credit rating. Such patriotism.

#9 Bowwow

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Posted 20 November 2012 - 12:55 AM

What a brilliant way to accomplish your goals, you folks deliberately sabotaged the emergency economic measures after a depression level economic collapse and actually managed to cause the US to get a downgraded credit rating. Such patriotism.


Stop spending then maybe the credit rating won't get downgraded.

#10 Ogaden

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Posted 20 November 2012 - 01:05 AM

Stop spending then maybe the credit rating won't get downgraded.


Ok , let's get rid of the US government, it's only 30% of the economy, that's no big deal right?

Oh wait unemployment is now at 68% and you have just lost your job, there's no social safety net, and your neighbors have already eaten the garbage. I guess you'd better go murder them.

Edited by Ogaden, 20 November 2012 - 01:07 AM.


#11 Bowwow

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Posted 20 November 2012 - 01:11 AM

Ok , let's get rid of the US government, it's only 30% of the economy, that's no big deal right?

Oh wait unemployment is now at 68% and you have just lost your job, there's no social safety net, and your neighbors have already eaten the garbage. I guess you'd better go murder them.


Did I say get rid of the government? No. I did say, however, is to stop this massive spending that we, the people, will end up paying for. Also, it's sad that 30% of the economy is government. For most of our history, it was 5% or less until 1960.

#12 Icewolf

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Posted 20 November 2012 - 02:45 AM

Stop spending then maybe the credit rating won't get downgraded.

I seem to recall the credit rating being downgraded because of political disunity rather than economic reasons. Which ties in with countries in Europe that still have triple AAA despite having worse debt and more spending than the US (UK is an example).

#13 Bowwow

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Posted 20 November 2012 - 02:48 AM

I seem to recall the credit rating being downgraded because of political disunity rather than economic reasons. Which ties in with countries in Europe that still have triple AAA despite having worse debt and more spending than the US (UK is an example).


That's probably the main cause.

#14 commander thrawn

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Posted 20 November 2012 - 11:08 AM

Also juslen I would dispute the idea that raising the minimum wage would lead to more outsourcing, everything you pay minimum wage for that can be outsourced is already outsourced, you can't outsource someone making you a fresh sandwich, sweeping your street, or any of the other menial jobs that have to be done here in your community. It would cause 'wage inflation', but the income gap is so absurdly severe in America this would be a good thing.


Nah, it would just make unemployment worse. Look at what Obamacare is doing. Companies are switching their employees to part time or firing enough to get under 50 so they don't need to buy insurance or pay a fine.

A high minimum wage just discourages people from hiring unskilled workers and instead waiting for candidates who are already experienced. It makes it harder for people to learn job skills if they aren't fortunate enough to have higher education or important ties to someone.

#15 commander thrawn

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Posted 20 November 2012 - 11:10 AM

What a brilliant way to accomplish your goals, you folks deliberately sabotaged the emergency economic measures after a depression level economic collapse and actually managed to cause the US to get a downgraded credit rating. Such patriotism.


One of the major reasons for the S&P downgrade was the failure of congress to make any meaningful changes to the status quo.

#16 commander thrawn

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Posted 20 November 2012 - 11:11 AM

Ok , let's get rid of the US government, it's only 30% of the economy, that's no big deal right?

Oh wait unemployment is now at 68% and you have just lost your job, there's no social safety net, and your neighbors have already eaten the garbage. I guess you'd better go murder them.


Irrelevant appeal to consequences and a hasty generalization (plus some I am not thinking of I am sure). Congratulations on your rhetorical failure.

#17 KainIIIC

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Posted 20 November 2012 - 11:30 AM

So why exactly should I believe Shadowstat, other than you say it's good and 'more correct', so-to-speak?

Nah, it would just make unemployment worse. Look at what Obamacare is doing. Companies are switching their employees to part time or firing enough to get under 50 so they don't need to buy insurance or pay a fine.

A high minimum wage just discourages people from hiring unskilled workers and instead waiting for candidates who are already experienced. It makes it harder for people to learn job skills if they aren't fortunate enough to have higher education or important ties to someone.


That's just a bunch of neo-classical and Austrian dogma, at least as long as the minimum wage remains as low as it currently is. In reality, a minimum wage increase has no macro effect on employment, and if anything, may increase it. But don't let facts get in the way of a good argument ;)

http://press.princet...itles/5632.html
http://www.frbatlant...ydocs/ACFA7.pdf
http://jir.sagepub.c.../50/3/489.short
http://www.irle.berk...umwage08_07.pdf
http://docs.google.c...S&embedded=true

#18 Ogaden

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Posted 20 November 2012 - 12:26 PM

All Shadow Stats does is calculates unemployment and inflation the way it used to be calculated, before it was 'adjusted' to display lower numbers.

#19 commander thrawn

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Posted 20 November 2012 - 02:20 PM

Right let's just ignore how price ceilings and floors work when it's convenient.

Edited by commander thrawn, 20 November 2012 - 02:21 PM.


#20 KainIIIC

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Posted 20 November 2012 - 02:48 PM

http://voxrationalis...tion-estimates/

  • For 2005-2010, CPI-U says cumulative inflation was 13.4%, ShadowStats claims it was 60%.
  • For 2000-2010, CPI-U says 28.7%, Williams says 144.7%.
  • For 1990-2010, CPI-U says 73%, Williams says 378.9%.

So lets go back 10 years. CPI-U indicates that what cost $100 in 2010 cost $77.71 in 2000. According to ShadowStats, what cost $100 last year cost just $40.86 in 2000.

Pretty dramatic difference. At least one of these figures is way off. Here’s where each person’s recollections come in (I haven’t bothered with an analysis of sample data since this giggle test is pretty damning). BLS says the price level’s increased by 29% since 2000, while Williams claims inflation of 145%. In 2000, was today’s $4 gallon of milk closer to $3.10 or $1.65? Was today’s $30,000 car closer to $23,300 or $12,250? Aside from gasoline and perhaps a house, there’s not much that’s debatable here.

Now let’s go back further. Changing the target to 1990, BLS says inflation over the last 20 years has been 73%. ShadowStats claims prices have increased 379%. John Williams apparently believes the price level is almost 5 times higher today than in 1990.

Can you think of anything that costs five times more today than it did in 1990? Examples:
  • Did a gallon of milk cost $0.80?
  • Did a pint of Ben & Jerry’s cost less than a dollar?
  • Did a 12-pack of Coke cost less than a dollar?
  • Did a case of Budweiser cost $5?
  • Could you get your shirts washed for a quarter?
  • Did Levi’s cost less than $10?
  • Was a Big Mac, fries, and a drink on the dollar menu – combined?
  • Did decent running shoes cost $20?
  • Did an entry-level Lexus cost less than $10,000?

Not even gas, housing, or college tuition comes close.


yeah, I wouldn't waste your time here.





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