THOSE FALLING AVERAGE WEEKLY EARNINGS of non-supervisory Workers. Steve Kangas recently posted a table to show the "fall" in wages in the USA. His figures are in the 82$ column. The wages were highest in 1978 ($301) and lowest in 1992 ($255). The much discussed "fall" is due to the "constant dollar" correction using the official Consumer Price Index (CPI). I have used Steves figures on Average weekly earnings of non-supervisory workers in "1982" dollars, (NOTE the comment from Jude Wanniski attached below) but I have "uncorrected" them back to "actual dollars" (column III). Those increase every year. But because of inflation, a dollar is worth less each year. But by how much? This is much debated. But *all* economists agree that the CPI overstates inflation. YEAR 82 $ actual$ 20%E 33%E 1965 290 94.9 250 224 1970 297 120 262 238 1973 315 145 281 258 1975 292 163 266 249 1976 297 175 273 256 1977 299 188 277 262 1978 301 204 282 269 1979 291 219 277 267 1980 274 234 266 261 1981 271 255 268 266 1982 267 267 267 267 1983 272 282 277 275 1984 274 294 284 281 1985 271 302 277 281 1986 271 307 278 283 1987 269 317 279 285 1988 266 327 278 286 1989 263 337 277 288 1990 259 351 277 290 1991 255 359 275 290 1992 255 370 278 293 The 20%E and 33%E correspond to overstating the CPI by 20% and 33%, roughly corresponding to Boskin (20%) and Greenspan (33%). Note that these do not show this fall in wages. (all in 1982 dollars). My point here is not so much that my figures are correct but that depending on the assumptions, you can "prove" that wages have gone either up or down. And of course all these averages neglect to consider that as the years pass, the workers are generally different people. Many get promoted or use their experience to get a better job, and are replaced by younger workers. And about one new worker in 3 now is a new immigrant, mostly from low wage countries. To get a better idea of what is happening in the economy, the SAME people should be tracked. For background on this, look at my web page files on Inflation, CPI/JKG, and "The Use of Statistics", "Income Mobility", and "Immigration: Does it Cause Half of US Population Growth?" AND this comment from Jude Wanniski (from his Supply Side University; Summer School Lesson #12): The frequently cited "real wages" for "nonsupervisory" workers are probably the worst data ever published by a federal agency. If more teenage workers find work, that pushes the average down (because the previous zero wage was not in the average). If more workers get 401K plans and health insurance, that has no effect on "wages." If more fast food workers get jobs as assistant managers, or secretaries are called executive assistants, they are dropped out of the average because they are no longer "nonsupervisory." The CPI-W price index used to deflate nominal wages is based on how urban workers spent their money in 1982, when many of today's best bargains didn't even exist. ,,,,,,, _______________ooo___( O O )___ooo_______________ (_) jim blair (jeblair@facstaff.wisc.edu) Madison Wisconsin USA. This message was brought to you using biodegradable binary bits, and 100% recycled bandwidth. Richard Clark: > Divorce and single parent families would be far less frequent in >this country if the median wage of males ages 18-24 had not been >halved over the last two or three decades. ^^^^^^^^ Grinch: Where do you keep getting these ideas? From the US Census Web page... Median income in 1996 dollars for males age 15-24: 1996: $6,960 1981: $5,350 That's *up*, not down. There's a break in the data series by age group if you go back much further, but going back from 1981 we can look at the overlapping data for ... Median income for males age 20-24: 1981: $13,783 1963: $12,401 Hey, that's *up* too! Anyone see anything getting "halved" here?