American Wages Have Actually Been Falling for 46 years

By Joshua Krause

It’s widely known by now that America has a serious wealth inequality crisis, and there is an abundance of evidence to support that assertion. While the wages of the top 1% of wage earners has risen by over 150% since 1979, the wages of the bottom 90% have only risen by 17.1% in that same time period.

Another key figure is the relationship between productivity and wages. While the average worker is nearly 2.5 times more productive now than he or she was in 1948, the wages of our workers have been stagnant. Hourly wages grew at nearly the same exact rate as productivity until the early 1970s, at which point they suddenly stopped growing, even as our workers grew more productive than they had ever been before.

Both of those statistics are frequently cited, but they don’t really paint a full picture of how bad this situation is. They make it sound like the middle class has merely stagnated. But when you adjust these statistics for inflation, and consider where the benefits GDP growth has flowed towards, it’s obvious that the middle class has been gutted over the years.

The wages of the bottom half of income earners has actually fallen by 4.6% since 1973, while the top 5% of income earners received a 51.4% pay raise. Meanwhile, American wages as a percentage of GDP have been falling for 46 years. While GDP per capita hasn’t really stopped growing in the big scheme of things, the average household income peaked in 1999 and never recovered. If the earnings of the average worker hadn’t so wildly diverged from productivity and GDP growth, the average household income would be $13,500 higher right now.

Instead this money has been siphoned off to the owners and shareholders of major corporations, as well as the government through taxes. These two forces, the corporations and the government, have been working together to bleed the middle class dry, and they’ve been succeeding for decades.

Joshua Krause is a reporter, writer and researcher at The Daily Sheeple. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger.