Wages Decrease

[FC]

Not Your Father's Income:

Why Wages Today Are Weaker

 

 

By Greg Ip

 

From The Wall Street Journal Online

 

American men in their 30s today are worse off than their fathers' generation, a reversal from just a decade ago, when sons generally were better off than their fathers, a new study finds.

 

The study, the first in a series on economic mobility undertaken by several prominent think tanks, also says the typical American family's income has lagged far behind productivity growth since 2000, a departure from most of the post-World War II period.

 

The findings suggest "the up escalator that has historically ensured that each generation would do better than the last may not be working very well," says the study, which is scheduled for release today. The study was written principally by John Morton of the Pew Charitable Trusts, which is leading the series, called the Economic Mobility Project, and Isabel Sawhill of the Brookings Institution. Other participating think tanks are the Heritage Foundation, American Enterprise Institute and the Urban Institute. (See the study.)

 

The Juggle

 

Are You Better Off Than Your Parents?

In 2004, the median income for a man in his 30s, a good predictor of his lifetime earnings, was $35,010, the study says, 12% less than for men in their 30s in 1974 -- their fathers' generation -- adjusted for inflation. A decade ago, median income for men in their 30s was $32,901, 5% higher than 30 years earlier. Ms. Sawhill said she isn't sure why men's wages have stagnated. "It seems there's been some slowdown in economic growth, it's possible that the movement of women into the labor force has affected male earnings, and it's possible that men are not working as hard as they used to."

 

The study suggests that absolute mobility -- the rate at which an entire generation's lot improves relative to previous generations -- has declined. But within a particular generation, individuals can still get ahead if relative mobility, the rate at which the rich and poor trade places, remains high. Poor fathers may have rich sons, and vice versa.

 

The report also found that between 1947 and 1974, productivity, or output per hour, and median family income, adjusted for inflation, both roughly doubled. Between 1974 and 2000, productivity rose 56% while income rose 29%. Between 2000 and 2005, productivity rose 16% while median income fell 2%, challenging "the notion that a rising tide will lift all boats," the report says.

 

Ms. Sawhill said several factors could explain the divergence: a growing share of income going to the highest-paid workers, or to profits; an increased share of labor compensation going toward benefits such as health care; or a decline in the number of wage earners in the typical family.

 

 

 

[fritz]

Tony,

 

First off, thanks for the info. And while I agree that men in their 30's today are not better off than their fathers, there may be reasons for this that were not mentioned in the article (unless I missed it).

 

When I was starting college, they asked in a questionaire, the following question---"Do you expect to be better off than your father?"

 

While my father was by no means a wealthy man (by the standards of the time), I also saw how he turned nothing into something. I saw him as a sucessful man, and I answered the question as NO.

 

Maybe they were missing something in their logic when they assumed that we must be better off than our fathers. Maybe they assumed (that's a word that can be interpreted as making an ass out of u and me) that the kids of that day will normally be better off than their fathers.

 

What they failed to see was this----in my father's generation a man could take a mule and 40 acres and turn it into a bigger farm, worked by the new machinery of the day, and with hard work----make a damned good living.

 

Oh, it may not have been considered "a damned good living" by the standards of the time, but all things are relative. And that is a fact that many studies, questionaires, etc. fail to take into play. Oh, they take into play the time worn-out phrase "inflation". But all things are relative.

 

While I considered myself being sucessful if I achieved the level of lifestyle that my father had, others assumed (there is that word again) that I have to be better off. Well, guess what? Now the studies, surveys, questionaires, etc. seem to say that men today in their 30's are NOT better off than their fathers.

 

I have a son in his 30's, and while he has a very good job with a tech company in Austin, I also see the possibility of him losing his job (and all he has worked for) overnight.

 

And now for the thing that I think that your article failed to mention (unless I missed it)-----

 

How many of the jobs (and thus the lifestyle) of men in their 30's today are affected by the American owned companies (at least once owned by America) closing up shop in this country and moving overseas?

 

I would like to think that may have something to do with it. But what the hell do I know, I'm just a dirt farmer that happened to be as sucessful as his father.

 

fritz

[swamprat]

 

"I would like to think that may have something to do with it. But what the hell do I know, I'm just a dirt farmer that happened to be as sucessful as his father."

 

 

fritz,

As long as a man has land he has wealth. There is a book called Mother Earth about a Japanese man and his relationship with the land. A great read and insight into wealth and keeping it.

 

Swamprat

 

[FC]

I'm sure the companies going overseas have something to do with it. I don't worry about me, because I'm doing just fine. Most of my brothers are too. However, I remember Mission Valley Mills closing in New Braunfels, and Victor (welding) and ATT going overseas from Omaha. My wife has a 50-something y/o friend who lost his job making cathode tubes in Cincinnatti.

 

Stuff made in America wasn't cheap. Chinamen could make it cheaper, which, hey, is great if you have a job and can pay for the stuff- you'll have more stuff, but not so good for the folks who lost their jobs. What I'll push on my girls is they MUST MUST MUST get prepare for a job for which there is a demand in the USA.

[Horsefly]

Us over 50 are the beans,taters,and cornbread generation,that had a good meal on Sunday.The younger folks now get most meals from a clown head asking,"would you like fries with that",and then setting down at a sure-enough tablecloth cafe a couple times a week.Figure up what eating most meals out cost,driving a 35,000.00 unit to pick it up,setting in front of a $3,000.00 wide screen while eating your slop from the clown,and take that out of the inflation equation,and other than job security,we still have it better than our folks.I don't think we're any happier than they,but have more opportunity and money to throw around.My son has had many many more opportunties than me,but I wouldn't trade places with him.Jerry

[roscoedoh]

After reading this, a couple questions came to mind:

• How did they gather their data?
• How was their sample size?
• What was their margin for error?
• What is the geographical boundary of their study?
• Did they factor in the recent rise in illegal labor?

While I am not exactly disputing the numbers this think tank developed, my training and experiences in political science have taught me to question polls and statistics. Its too easy to "tweak" statistics to read what you want them to read for me to trust them implicitly. Furthermore, I generally distrust what I see/read in the media anyway.

 

-Jason

[fritz]

Jason,

 

Amen! I agree with the fact that polls, surveys, etc. can and will be used for a specific end.

 

Jerry,

 

"and other than job security,we still have it better than our folks.I don't think we're any happier than they,but have more opportunity and money to throw around."

 

Agreed. BUT, the job security thing is the catch. I agree that I am no happier than my father was, and while I have more money to "throw around", I don't.

 

That is something that I learned from my father, who went through the Great Depression. Even though he amassed a goodly sum by hard work, he did not "throw" it around.

 

Call that being a cheapskate, a tightwad, whatever the hell you want to call it----the fact that going throught the Great Depression set the way he lived the rest of his life. I do believe that he expected another depression in his lifetime, and he prepared for it.

 

Now, that is the main difference between his generation, mine, and my son's generation. I guess it is only natural that, as generations pass, they forget about the past generations. And polls, surveys, etc. do not take that into play.

 

Schitt, that would be old-fashioned for a pollster, a surveyor, or whatever the hell he calls himself, to understand. Much less to take into consideration in his poll, survey, etc. that he already has reached a conclusion before he starts to write.

 

In case you did not get it, I agree with Jason wholeheartedly about studies put into print in the media of today. Let a man (or woman) who has experienced the real life, the life that may be different from his/her observation of what he/she thinks, let that man or woman write something and get it published in today's media.

 

Good luck!

 

fritz

[littlecanoe]

Jerry,

I think that you nailed a big part of the issue of what "better off" really is.

 

I've been noticing for years that a new couple want to get married and have exactly what it took their parents 20 to 30 years to have. That's not right. If the modern lust for more stuff is calculated into that study it makes it a bit skewed I think.

 

BTW love the "clowns head" I can just see it! Maybe it's Bozo getting fries from Mickey.............

 

lc

[karlunity]

Sad, but true fellas.

 

I have this example I give the students.

 

In 1964, a quarter would buy 5 candy bars or two cans of soda, two comic books or, two packs of twinkies.

 

Then I ask the what it cost now??

 

You should see the reactions I get!!

 

I blame it on LBJ for diluting the value of the coinage and Nixon for taking us off the gold standard.

 

The free traders started to move the factories in Asia in the 70's remember how the Ladies garment workers union complained?

 

Hell, people are so dam blind and in love with the idea of free trade that I got cussed out when I called for tariffs at a UNION meeting.

 

Karl

[fritz]

"Hell, people are so dam blind and in love with the idea of free trade that I got cussed out when I called for tariffs at a UNION meeting."

 

 

Well, I still remember the days of my early farming. The days that I farmed my land for a decent living for me and mrs fritz. The days that my farming, with its hard work and questionable crops, meant the difference between income or loss.

 

Enter the grain embargo. Enter the use of agricultural products as a State Department ball to use in THEIR ball game. Makes no nevermind if the ball was theirs, or owned by family farmers all over the country. This country used THEIR farmers to gain political points from other countries.

 

Without our permission. But so did the other guy.

 

Hell, why should they need our permission? Just name me one time when our government has asked permission from its citizens before doing what it wants to do?

 

And let's not bring up some other things that come to mind. Let's stick to agriculture, and the way our country has used it as a State Department tool.

 

fritz

[FC]

The article doesn't quote where the info came from.