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U.S. Standard of Living has dropped 57% in 40 years

OGBDeacon07

OGBDeacon07

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Sad stuff. See stats below:

NEW YORK (Bullion Bulls Canada) -- In writing about the relentless collapse of Western economies, I frequently point to "40 years of plummeting wages" for Western workers, in real dollars. However, where I have been remiss is in quantifying the magnitude of this collapse in Western wages.

On several occasions, I have glibly referred to how it now takes two spouses working to equal the wages of a one-income family of 40 years ago. Unfortunately, that is now an understatement. In fact, Western wages have plummeted so low that a two-income family is now (on average) 15% poorer than a one-income family of 40 years ago.



Regular readers will recognize the chart below on U.S. average wages.

Using the year 2000 as the numerical base from which to "zero" all of the numbers, real wages peaked in 1970 at around $20/hour. Today the average worker makes $8.50/hour -- more than 57% less than in 1970. And since the average wage directly determines the standard of living of our society, we can see that the average standard of living in the U.S. has plummeted by over 57% over a span of 40 years.

There are no "tricks" here. Indeed, all of the tricks are used by our governments. The green line shows average wages, discounted by inflation calculated with the same methodology for all 40 years. Obviously that is the only way in which we can compare any data over time: through applying identical parameters to it each year.

Then we have the blue line: showing wage data discounted with our "official" inflation rate. The problem? The methodology used by our governments to calculate inflation in 1975 was different from the method they used in 1985, which was different than the method they used in 1995, which was different than the method they used in 2005.

Two obvious points flow from this observation. First, it is tautological that the only way in which data can be compared meaningfully is to use a consistent methodology. If the government thinks it has improved upon its inflation methodology, then all it had to do was take all of its old data and re-calculate it with their "improved" methodology. Since 1970 there is this invention called "computers" which makes such calculations rather simple.

This brings us to the second point: the refusal of our governments to adopt a consistent methodology in reporting inflation statistics can only imply a deliberate attempt to deceive, since it is 100% logically/statistically invalid to simply string together disconnected series of data -- and present it as if it represents a consistent picture. More specifically, we can see precisely what lie our government was attempting to get us to believe.
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but it's because of the destruction of dual-parent families fueled by the safety net which is part of the Democratic conspiracy to keep blacks poor and voting D.

jhmd, hip these squares to the truth, baby
 
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Good thing the stock market has been doing well though, amirite?
 
There are no "tricks" here. Indeed, all of the tricks are used by our governments. The green line shows average wages, discounted by inflation calculated with the same methodology for all 40 years.
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Complete and utter bullshit. But of course, his source is shadow stats.com, which is like statistics for morons.

The blue line is bad enough. No need to make shit up.
 
WFFaithful said:
The growing divide between the rich and poor will destroy this country.
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The relativity between rich and poor within the U.S. is mostly irrelevant. The divide (or lack thereof) between U.S. "poor" and rest of the world is important, however. What is destroying and will continue to destroy this country is our lack of manufacturing jobs and our piss-poor public education system. Both of those are not going to be rectified anytime soon if ever, and we have nobody to blame but ourselves.
 
2&2 Slider To Leyritz said:
The relativity between rich and poor within the U.S. is mostly irrelevant. The divide (or lack thereof) between U.S. "poor" and rest of the world is important, however. What is destroying and will continue to destroy this country is our lack of manufacturing jobs and our piss-poor public education system. Both of those are not going to be rectified anytime soon if ever, and we have nobody to blame but ourselves.
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Two sides of the same coin. Poor people stay poor (or become poorer) because the education system is shit and quality jobs are moving elsewhere. Oh, and who do you think is making the decisions to underfund education and build plants overseas? The poor?
 
It's interesting to note that real wages began dropping after Nixon took us off the Gold standard.

Another win for sound money advocates?
 
PhilliesDeacs said:
Two sides of the same coin. Poor people stay poor (or become poorer) because the education system is shit and quality jobs are moving elsewhere. Oh, and who do you think is making the decisions to underfund education and build plants overseas? The poor?
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Their bootstraps.
 
PhilliesDeacs said:
Two sides of the same coin. Poor people stay poor (or become poorer) because the education system is shit and quality jobs are moving elsewhere. Oh, and who do you think is making the decisions to underfund education and build plants overseas? The poor?
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Agree with this. But the problem is you can't force jobs to stay. Jobs move overseas because it is more beneficial to the company to do so. To enforce higher wages makes that even more enticing. Education is the most important factor in this that we can truly influence without throwing the baby out with the bath water. A lot of the potential solutions (such as higher minimum wage) are only going to exacerbate the problem when it comes down to practice. You can play the blame game, but that is the reality. A business is not going to pay an American worker $15 to do what they can pay a South American worker $2.

But education is something we can impact. Our approach is awful. We aren't training our children to do anything in high school except for maybe go to college. For the students that can't afford college they are up chocolate creek without a spoon. We need a complete overhaul in my opinion starting with giving states and local entities much more authority on how they can run their districts. The more we decentralize the public school system the quicker we will find out what works and what doesn't. Some areas will try something new and it will be a total flop, but there will be some places where they figure out a GREAT adjustment to the system and then other localities can copy and tweak.

Good point Phillie
 
PhilliesDeacs said:
Two sides of the same coin. Poor people stay poor (or become poorer) because the education system is shit and quality jobs are moving elsewhere. Oh, and who do you think is making the decisions to underfund education and build plants overseas? The poor?
Click to expand...

Pretty tough for 98% of the population to deflect blame to 2% in a democratic society, regardless of how much money the 2% have.
 
2&2 Slider To Leyritz said:
The relativity between rich and poor within the U.S. is mostly irrelevant. The divide (or lack thereof) between U.S. "poor" and rest of the world is important, however. What is destroying and will continue to destroy this country is our lack of manufacturing jobs and our piss-poor public education system. Both of those are not going to be rectified anytime soon if ever, and we have nobody to blame but ourselves.
Click to expand...

There is a link between the lack of manufacturing jobs, poor education, and the income inequality between rich and poor. The companies that are moving jobs to Asia or replacing them with technology are highly profitable, and those profits flow to the rich people who own most of the stock and to the executives who get very lurcrative pay packages. Many of those companies could share some of those profits with their workers, or hire more unskilled workers and train them instead of expecting the government to train their workforce, and still be profitable, just not as profitable as they are now. Furthermore, poor people are more difficult to educate. Profitable corporations and the wealthier segments of society could agree to higher taxes to improve our education system or provide other public goods to help the poor improve their lot, but by and large they do not.

I am not suggesting or advocating for a legislative restriction on profitability or mandatory hiring or anything like that, I post simply to point out that it is disingenuous to state that there is no link between income inequality and the lack of manufacturing jobs and poor education.
 
It's a representative democracy. This system was constructed so the 98% wouldn't have too much power and would vote for which 2%er to represent their interest.

2&2 would have a better point if this was a direct democracy.
 
The spoils of a manufacturing economy have passed us by. The manufacturing bubble busted long before the tech or housing bubble were even thought of. The problem is that our government won't allow manufacturing companies to fuck their employees and communities, while these companies can simply pay off politicians in 2nd world Asian, African, and South American countries and pursue maximum profits unchecked. We need special tariffs for these ex-patriot, traitor companies.
 
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Yep. The ONLY reason American companies won't exploit American workers is regulations. That's it. And even then, people have argued that we should loosen those regulations because somehow a crap job in substandard hazardous conditions making low wages is better than no job at all.

Until the job creators create better jobs in the US, we will have chronically unemployed people and need a system to deal with the unemployed.
 
The original article can be found at: http://www.bullionbullscanada.com/us-commentary/25308-us-standard-of-living-has-fallen-more-than-50 I would not trust it given the source. I also would not trust it because it is arguing that, according to some bizarre, made-up method of calculating inflation, U.S. wages have fallen from a median $40,000 per year down to a median $18,000 a year, and that this is all thanks to America shipping its lowest skilled, lowest paid factory jobs to the third world.
 
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