Courtesy of Mish.
What follows is a guest post from Doug Short at Advisor Perspectives. This post has its roots in a discussion we had about “real” (inflation-adjusted) wages.
Doug took our initial discussion and merged it with the number of hours people work.
Here is the decidedly bleak result: Real weekly earnings were $825 in 1973. Today they are $690.
Doug Short Guest Post
As a follow-up on some collaboration with Mike Shedlock in advance of his recent commentary on wages over time, here’s a perspective on personal income for production and nonsupervisory private employees going back five decades.
The Bureau of Labor Statistics has been collecting data on this workforce cohort since 1964. The government numbers provides some excellent insights on the income history of what we might think of as the private middle class wage earner.
The first snapshot shows the growth of average hourly earnings. The nominal data exhibits a relatively smooth upward trend.
here are, however, two critical pieces of information that dramatically alter the nominal series: The average hours per week and 2) inflation.
The average hours per week has trended in quite a different direction, from around 39 hours per week in the mid-1960s to a low of 33 hours at the end of the last recession. The post-recession recovery has seen a disappointingly trivial 0.7 bounce (that’s 42 minutes).
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