Over recent years, there’s been a strong feeling in the wind to the effect that ordinary Americans had it better in the past, where “the past” can be any period from, say, the 1980s all way back to the 1950s. In response to this feeling, economists and commentators have posted charts demonstrating that actually, the standard of living has improved. See this discussion at X.
@talmonsmith says “the (losing) ideological narrative since 2016 — or really 08 if you frame Obama as a Change candidate and then Anti Corporate Raider vs Romney in 2012 — is laptop professionals telling people that things are more or less fine”..and he posts this chart.
To which @HistoryBoomer replies: “I don’t get this. The chart he used literally shows that, after a period of stagnation in the 70s and 80s, wages have been climbing since the mid-90s. Even for the bottom 10% of workers. What am I missing? Does he see something in this chart that I can’t see?” And @StatisticUrban says: “The reality that American wages have risen, not stagnated, just rips apart countless political and ideological narratives. So much so that many just act like it hasn’t happened.”
For those who are sadly still X-less, here’s a chart of real hourly wages (2024$) by percentile, from 1973-2024. If you look at the line for the 50th percentile–the median–note that the inflation-adjusted hourly wage in 2009 was $22.12, and that in 2016 was almost identical: $22.44.
Here’s an interesting and thoughtful analysis from Sebastian Jensen. He looks not only at alternative measures of income over time (from here), but also at other indicators of well-being: self-reported happiness, suicide rates, the education system, dating, and more.
See also Noah Smith, who argues that “The great stagnation of American middle-class wages from 1973-1994. It was NOT during the era of hyper-globalization.”
Your own thoughts?
The government is lying about inflation. It has changed the way it is calculated multiple times because reasons. It’d been a while since I visited but Shadowstats.com shows the inflation rate if calculated by prior methodologies. There was a long stretch when the official rate was something like 4% and as calculated by the old method it was around 11%.
I skimmed through the links. As a former steelworker it was nice to see a steel mill pic used to start out yet another piece demonstrating the usual head-scratching befuddlement about why so many people are peeved.
Since I can be as befuddled as anyone else, I’ll give my answer. The Democrat party was the party of slavery in 1860 and it is the party of slavery now. We are ruled by these people, and their Geee Ohh Peeee pets.
Illegal immigration has had roughly the same effect as if the South had been able to re-open the African slave trade before the Civil War. But it’s worse, because in addition to importing a de facto slave class into the US they’ve also arranged to offshore a vast amount of the economic activity that used occur domestically. This has made the modern equivalent of the Slavocracy- the few percent of people who own the vast majority of the stock market- very wealthy.
They mean to keep it that way, so we get an endless stream of bovine excrement spewed out of the legion of Swamp think tanks telling us how awesome everything is and how wrong we are to think things have gotten worse. So shut up about it, losers.
The real question isn’t whether or not American wages have stagnated. It’s what American wages would have been without mass illegal immigration and endless offshoring.
Xennady…”The real question isn’t whether or not American wages have stagnated. It’s what American wages would have been without mass illegal immigration and endless offshoring”
What matters is *real* wages, of course…yes, American wages (at least wages for people in fields exposed to competition from offshoring & illegal immigration) would have been higher..but would average or median wages have still been higher after accounting for the higher costs of many products when produced domestically?
One thing that would surely have happened in a domestic-production scenario is more technology and capital investment to drive down production costs as much as possible. There also might have been more pushback against irrational regulations and against manufacturing-harming tax policies.
But would these things have been sufficient to substitute for the vast differences in wage costs?
It’s worth noting that America was known for mass affluence long before offshoring and China came onto the scene in a big way. Economist Art Laffer said in 2019: ““China is a huge plus to the U.S. because without China there is no Walmart, and without Walmart there is no middle class or lower class prosperity in America.” I critiqued this view here:
https://chicagoboyz.net/archives/58984.html
And, of course, the matter of *national resilience*…against unfriendly nations as well as natural disasters…should not be ignored.
From the Noah Smith link
After I wrote the post, John Lettieri of the Economic Innovation Group wrote a great thread that strongly supports my argument. He showed that the timing of America’s wage stagnation — roughly, 1973 through 1994 — just didn’t line up well with the era of globalization that began with NAFTA in 1994. In fact, American wages started growing again right after NAFTA was passed.
I kinda of suspected the claim was based on a carefully selected definition of when ‘globalization’ occurred. I guess all those steel mills and manufacturing plants that shuttered between 1970 and 1990 had absolutely nothing to do with wage stagnation.
All economists (and politicians) want to talk about is numbers. Meanwhile, people are trying to tell them how American life feels.
And that’s a perfect thing for economists to discount, a la Ben Shapiro and “facts don’t care about your feelings.”
But it’s a message that’s ignored at a measure of risk. You get a sense of it reading Salena Zito’s columns, which are mostly about Pennsylvania, but they track for other parts of the country.
Americans have a lot to contend with these days. We pay our taxes, only to see them spent on things most of us would consider perverse and wasteful. Meanwhile, the roads are falling apart, the streets are covered with garbage, and cities are full of homeless, mostly drug addicts and mentally ill. You can’t go a day without hearing about the pernicious reach of racism, even though people of different races seem to cooperate and get along for the most part. Also, half the country seems to consider the other half mortal enemies.
AI is coming, probably for a lot of jobs, which have been tenuous for years. And the illegal immigrants are here, sucking up resources, unable to drive safely, read or speak English. And many social interactions, which used to be manageable or enjoyable, are now harrowing. I gave up on Target because of them allowing men in women’s bathrooms, but also because their business practices made shopping there a painful chore. You can’t go get fast food because you have to interrupt a teenager on his phone who sighs and deigns to hit a few buttons to screw up your order, which could hit twenty dollars.
American life seems like being forced to watch Charles Bronson’s Death Wish, where everything was in decay, nothing was good, nothing was safe or joyful.
And that’s not even everything. So tell me how we are supposed to look at real wages and say, “Oh, I guess everything is fine.”
I’ve seen a lot of assertions to the effect that “everyone was healthy until we had Big Food and Big Pharma.” The is false, of course, the past was rife with infectious diseases and, in some areas even in the US, malnutrition.
Here’s some data on trends in infectious disease mortality.
https://jamanetwork.com/journals/jama/fullarticle/768249
Gold’s buying power is approximately constant over time. An ounce of gold in one era will buy approximately the same amount of goods and services that it will in another.
If you compare how much gold a minimum-wage earner’s annual salary would buy in 1960 to how much gold it will buy in 2020, you find that buying power, as expressed in gold, drops sharply, even as the actual inflation-adjusted dollars seem to retain parity.
There was a bit, some time ago, about how a minimum-wage earner in the early 1960s could buy more gold with his gross salary then, than an experienced engineer could in 2015.
Inflation has been gamed to look less worse than it is. Wages have not kept pace with inflation, and government has imported millions of cheap workers to keep wages low.
Taxes are a lot higher – and generally both spouses now work to maintain their lifestyle – but – people want more now, Even in the 50s it was normal to have 1 car in the family. Houses were smaller. Children were I think a lot happier in those days with a stay-at-home mother. But the Cold War was in full bloom and the country was terrified. (talking about the 1950s).
Things like dishwashers were a luxury – not they are a necessity.
And interesting question for which I can’t really have a quick answer.
…but would average or median wages have still been higher after accounting for the higher costs of many products when produced domestically?
Interesting question, but as you say one thing that would surely have happened in a domestic-production scenario is more technology and capital investment to drive down production costs as much as possible. In my view that’s what happened in the late 19th century, when real wages doubled, so my answer is yes, wages still would have been higher.
I would add that productivity drives higher wages and higher living standards, which would necessarily result in some jobs and categories of jobs being rendered obsolete, which also happened in the 19th century. The result today would be that we would have become a more technologically advanced country with fewer low-skilled and low paying jobs.
For example, it appears that fast food restaurants can be automated to a much greater extent than they actually are. My take is that in my hypothetical country wages would be such that fast food would employ many fewer people at those higher wages, but because of the automation those restaurants would still be viable.
Instead, in the country that actually exists, the government mandates higher wages for fast food workers and the restaurants go out of business. Not good, but because so much economic activity has been offshored and the actual wages for what remains have been declining for decades, the political process has gifted us government mandated raises.
It’s worth noting that America was known for mass affluence long before offshoring and China came onto the scene in a big way.
Yes, and a great deal of that affluence developed under the tariff regime in place prior to the Great Depression. I note that US never had much of a viable communist or fascist movement during that time, because of that affluence.
It appears different today, at least in certain states.
Xennady…there was a pretty strong and sometimes violent Leftist movement circa 1900.
Have wages kept up with inflation?
FWIW – when I started working for the Federal Government in 1974 as a GS-3 making $3.08 an hour. I was a skier and a lift ticket at my local hill was $6.50, just over two hours work.
Now a GS-3 makes $12.93 and hour and a lift ticket at that same hill was $111 last season, more than one entire days earnings.
Hank A: “… more than one entire days earnings.”
That seems to be a more useful way of looking at costs versus income — how many hours does someone have to work to pay for an item?
When I started work as a graduate engineer in the later 1970s, I was able to buy a brand new nice middle-of-the-road US-made automobile for the equivalent of about 3 months pay. Today, for an engineer in a similar position, the automobile would probably cost at least 6 months pay — and it would probably be imported too!
Imports definitely destroy US jobs, but do they really reduce costs for those US citizens fortunate enough to still have a yet-to-be-offshored job?
Grok, please calculate the cost of the following in hours of labor required for the median-salaried American: mid-priced automobile…washing machine…t-shirt….Please compare with the same (or similar) products in 1980 and in 1960.
Mid-priced automobile was 938 hours, 1304 hours, and 1050 hours for 1960, 1980, and 2025 respectively.
Washing machines was 127, 74, and 26.
T-shirt was 1.4, 1.3, and .7.
These calculations do not account for taxes.
https://x.com/i/grok/share/pBDa8lF4unw63xziEPdM2jgTE
Linked & being discussed at Grim’s Hall
https://grimbeorn.blogspot.com/2025/05/golden-age.html
..where some links to posts about the effect of fiat currencies are provided.
I have to wonder if it’s not so much overall inflation but where the inflated prices are- it *feels like* the increases are in things we *need*- like fuel, electricity, insurance, and in things that can get you ahead- college has outpaced *everything* in cost. In the meantime, lots of cheap extraneous items and lots of ‘affordable’ luxury items- but does any of that matter to people on the bottom half? If my sensibilities on this track with reality, doesn’t that matter?
“Mid-priced automobile was 938 hours, 1304 hours, and 1050 hours for 1960, 1980, and 2025 respectively.”
Sorry, Grok, you just failed the Artificial Intelligence IQ test. Automobiles were more affordable in terms of needed hours of work in 1980 than they are today? And by a significant margin? That fails the smell test.
Gavin..is the Grok link readable for you?…not sure how visible it is. It specifies the car models used for comparison and the median income info used. If it isn’t visible, I’ll summarize in comments.
I realize, of course, that skiing is a “luxury”, but the cost of a day of skiing is still in the ballpark for many other common recreational events – amusement parks, golf, sporting events, concerts, etc.
There’s also the complicated issue of value for money over the years. The car you bought in 1980 would last about 100,000 miles before major, as in engine overhaul, maintenance was required. Throughout the 2,000’s, you could reasonably assume 2-300,000 for gas and more for medium diesel. EPA mandates and poor engineering choices may be bringing that to an end.
Tee shirts and washing machines seem to have moved in the opposite direction.
Now do the numbers on computers.
Were I determining the cost of lift tickets, my aim would be to keep the crowds and lines just below acceptable levels and no more. Let the cost sensitive find a way to ski during the week.
Food in the U.S. remains quite cheap while the cost of hiring it’s perpetration and service (restaurants) is increasing with wages. This will probably change on the low end as capital is traded for labor. On the high end, you’ll pay a premium for personal service. Restaurants have been low capital enterprises with a high failure rate but relatively low cost of entry. This will change. Franchisors like McDonald’s will have to compete on technology rather than name recognition and promotion.
David F: “… is the Grok link readable for you?”
Unfortunately not. But it does seem that Grok’s assertion it takes fewer hours of work today to pay for a car than it did almost half a century ago in 1980 is unlikely. Why are so many “median income”-type people today buying used cars rather than new cars?
“Why are so many “median income”-type people today buying used cars rather than new cars?”
Maybe they’ve wised up about that incredibly expensive trip over the curb from the dealer. Also, see my point about life expectancy. A 50,000 mile car still has many years of relatively trouble free life if you pay attention.
Here’s a summary of Grok’s calculations on the hours to buy cars.
In 2025, median hourly wage estimated at $30.29.
Camry or Accord in 2023 priced at $25-$35, taking the midpoint and carrying forward for inflation, it gets $31827. Dividing, that’s 1051 hours of work to buy.
In 1980, median hourly wage $5.60. 1985 Honda Accord $8845, adjusting backward for inflation, $7300. Dividing, 1304 hours.
In 1960, median hourly wage $2.40. Average auto price $1500-3000, Grok assumed $2250 for a Chevrolet. Dividing, it gets 938 hours.
…there was a pretty strong and sometimes violent Leftist movement circa 1900.
1900 you say? The year tariff-loving William McKinley was re-elected? Is the rest of my comment so spot-on that you have no other disagreement?
Anyway, my take about the pretty strong and occasionally violent Leftist movement you note is that they were the rough equivalent of the 2010 Tea Partiers- they made a lot of noise but were essentially irrelevant to ruling the country.
Lots of definitional and inflation-related issues in trying to make sense of this. For grins, here is what one internet source has to say:
https://dqydj.com/individual-income-by-year/
In 1980, median individual annual income was $9,365 in 1980 dollars; corresponds to $39,386 in 2024 dollars.
Using the Grok estimate of a car cost in 1980 of $7,300, that means a car cost about 94% of the median annual income.
In 2024, median individual annual income was $50,200 in 2024 dollars.
Using the Grok estimate of a car cost in 2025 of $31,827, a car would cost only about 63% of the median annual income.
That supports Grok’s assertion that it takes the median earner fewer hours of work to buy a car today than it did in 1980. Well done, Grok!
However, it just does not seem to match with lived experience. Back in 1980 time frame, lots of people would buy a new car every 3 years, whether they needed it or not. Today, it seems that most people do not buy new cars so frequently. Indeed, it seems that those who do change cars frequently don’t buy cars at all — they lease them.
This leaves me puzzled. The numbers are what they are, but they do not seem to describe reality. Perhaps there are some other factors which make car-buying today more of a burden for many people than in the 1980s. Although the inflation adjusted individual annual income may have jumped from $39,386 to $50,200 in 2024 dollars, it may be that the inflation-adjusted net disposable income (after taxes, housing, college loans, insurance, other living expenses) is lower today than in 1980?
I bought brand new cars in 1969, 1971, 1973, 1975, 1978, 1980, 1997, 2010.
Used cars 1968,1985, 1986, 1988, 1990, 2019.
re less-frequent car-buying…several factors at work, I think:
–cars last longer without falling apart or requring excessive maintenance
–for most people, cars aren’t as important as a status symbol as they once were (although I’m not sure that *political beliefs* as a status symbol are an improvement)
–the car-buying experience has become increasingly unpleasant
Davd F: “re less-frequent car-buying…several factors at work, I think:”
Certainly those are valid factors which must have influenced some buying decisions on the margin. However, if cars became cheaper in real terms (hours worked to buy), what were people doing with the “hours worked” savings they got from buying cheaper cars less often? We know they (we) were not saving the money!
This may be a chicken & egg situation. Did people buy cars less often after the 1980s because they had joined the environmental movement and were eschewing conspicuous consumption? Or did they buy cars less often because they had less disposable income to spend because of the great acceleration in the costs of housing and student loans after the 1980s?
Anecdotally, lots of young people today have de-emphasized car buying, versus the “owning a car” rite of passage attitude of young people in the later 1960s & 1970s. However, it also has to be noted that many young people today simply cannot afford a car. The situation has too many “hidden variables” to let us treat an analysis that costs in terms of hours worked are going down as the whole story.
Hank A’s new car buying history is an interesting anecdotal insight. Between 1969 and 1980, Hank bought a new car about every 2 years — which was not unusual in those years. After 1980, Hank bought a new car about every 15 years — again, not unusual. It would be interesting if Hank is prepared to share what factors led to such a marked change in his buying behavior.
1969 & 1975 vehicles were wrecked and repaired, but weren’t the same afterwards, and I suspect I’d have kept either of those much longer otherwise. 1971 was a lemon as was 1997.
1985 was an expensive sports car which I decided to sell to invest in property and buy a more economical 4wd.
Mark Andreessen has a relevant graph:
https://x.com/pmarca/status/1926673943559106814
I once bought a new motorbike and once a new car. Otherwise it’s been second-hand. Our non-scrapyard-standard cars in the UK have lasted us 15 years (from new), seven years (then stolen), 19 years, and – currently – ten years.
We’d hate to lose our current Diesel car – more modern model years are compulsorily equipped with “green” tech which makes them less reliable. We also don’t want silly electronic “advances” that serve to make driving less safe and pleasurable. I exempt from that criticism backward-looking TV cameras which I imagine are pretty useful.
Then again, I commuted by push-bike for a quarter of a century and all our errands were also done by bike. Temperate climates and flat country have their advantages.