REAL WAGES IN THE U. S. A.

                                           Let's Do The Numbers

   Let's do the basic US wage and productivity numbers that seem to elude most radio, newspaper, and TV commentators. The data comes from the US Bureau of Labor Statistics , gathered and interpreted by the Economic Policy Institute ( see www.epi.org/datazone ). 

  From 1973 to 2005, this is what happened to the 80 percent of US workers in non-supervisory jobs. Their hourly wages --- adjusted for inflation and expressed in 2005 dollars -- rose from $15.76 to $16.11. That is, over a 32-year period, most US workers enjoyed a stunning 2 percent increase in what their hourly pay could buy. Because their work weeks shortened over over those years, their real weekly pay ---what they could actually afford for a week's pay --- actually fell from $581.67 to $543.65, a decline of 6.5 percent. This means that workers' wages could buy less in 2005 tun in 1973. 

   Over the same thirty years, US workers produced 75 percent more. In the language of economics, that's how much output per worker ---"productivity"---rose. Corporations got 75 percent more goods and services produced per worker. They sold that extra output and thus got much more revenue and profit per worker employed. Yet what they paid those workers did not rise. Stagnant wages did not allow the workers to buy any of the extra output they produced. 

   Why and how did this happen ? Over the last three decades, jet travel, computers, the internet, and cell phones changed every workplace on the planet. Companies survived global competition if they produced more with fewer workers.  So they changed technology to replace people with machines, and they successfully pressured the remaining employees to work harder and faster. At the same time they moved production to places where they could minimize costs by using dangerous technologies and production methods (think lead-contaminated toys or chemically dangerous pet food and so on). Perhaps they bribed local authorities to ignore the resulting ecological, safety, and health problems ; perhaps they just looked the other way as in "failing to properly supervise." In any case, what mattered and what happened was that productivity rose. 

   Wages, however, went nowhere because US corporations (1) outsourced what had been US jobs to cheap labor overseas, (2) imported immigrants willing to work for less, (3) threatened to export their jobs if US workers pushed for higher wages, and (4) financed politicians who legalized all these actions and undercut the already shrinking unions. In 1973, union contracts covered about 24 percent of US non-supervisory workers. By 2005, that number fell to 12.5 percent.

  And always, a growing army of well-paid commentators in the mass media glorified the "efficiency of the world economy." Sometimes, troubling facts arose to threaten the constant celebration (anti-free-trade protests, scandals involving toxic exports, etc.). The commentators found ways to ignore them, deflect attention from them, and soothe their audiences by recalling the wonders of "the new modern economy." 

   Yet the importance of rising worker output coupled with stagnant real wages is clear for anyone willing to see. It is exploitation getting worse. The huge size of the post-1975 productivity -wage gap overwhelms all the usual quibbles about the statistics. The gap between the standard of living that their rising productivity made possible and the standard of living their wages could afford got wider every year. 

   So workers rebelled. With their wages effectively frozen and no union, party, or social movement available to unfreeze them, workers responded individually. Women moved massively to add wage-labor to their household. Families Families undertook massive personal debt. As families and finances became shaky, anxieties grew. Upset by frightening changes on so many levels, Americans sought reassurance or escapes from new pressures. Fundamentalisms enjoyed revivals : in churches, synagogues, and mosques but also in politics, patriotism, "family values," and economics. Escapisms bloomed --- spectator sports, drugs, alcohol, food, but also fitness, pornography, and the private tech-worlds of iPods, blogs, chat rooms.