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Friday, April 4, 2014

Money, money... More Money? Average Hourly Income Graph

The Average Hourly Income of Production and Non-Supervisory Workers in 1982-1984 Dollars:

Average Hourly Earnings of Production and Non-supervisory employees adjusted for inflation

The BLS shows us the average hourly income of production and non-supervisory employees, which eliminates managers and most fat cats, as expressed in 1982-1984 dollars, on the above graph.  The average hourly wage reached its lowest recent point back in the end of the George Bush I/early Bill Clinton days in 1990 through 1996.  It then started to ramp up, reaching a post-80's peak in 2003.  It was very volatile, probably due to inflation, in the 2003 through 2008 period of time, and then started to climb as the Recession took hold.  (During a recession, prices often decline and we have deflation vs. inflation.  Despite a poor job market, wages adjusted for inflation often rise during such economies.)

As deflation resolved and the economy started to grow in 2009 and 2010, the rise in inflation-adjusted wages evened out.  It fell off some in 2011 and 2012, but then started to rise again in 2013 as the economy did start to add jobs.  We don't have this figure for March yet, but in February 2014, this number was equivalent to what it was in 1979, before a period of high inflation.

We've all heard that household income has barely started to rise and that most of the gains in productivity have gone to the upper 1 to 10%.  Despite the rise in inflation-adjusted wages for "regular" workers, income and wealth inequality continues to widen.  And, of course, as we look at the graph above, we can see that we are nowhere as well off in inflation-adjusted hourly wages as we were during 1972-1973.  

The above graph raises more questions than it answers, though:  If average wages, even for the peons, are actually rising, why does it FEEL as though they aren't?

And how do those wages look WITHOUT adjustments for inflation?  Like this:

Average Hourly earnings of Production and Non-supervisory Employees NOT Adjusted for Inflation

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