A factor the author didn't really touch is housing. By 1973 many places in CA at least were starting to ban dingbat construction via ordinance against back out parking setups. We also see many cities in CA and elsewhere downzoned around that time. LA went from being zoned for over 10 million people in 1960 to being zoned for just 4.2 million and being built to almost 95% of its zoned capacity by the 2010s.<p>I'm not sure exactly the relationship between wage growth and restriction of housing growth but the fact that these phenomenon seemed to happen in lockstep merits some reflection. Prop 13 also came in 1973.
There's a great graph showing the wages stagnating compared to GDP growth. It looks like wage's haven't gone up. But, when adding back in employer provided health coverage and other benefits, the graphs align again. It just wasn't in dollars. TFA briefly mentions it but I think it should be front and center.
I know this is being overly reductive, but I think it sort of boils down to not enough minimum wage workers that vote and everyone else either not caring about low-wage workers, being held hostage by "right to work" (means you can get fired any time for any reason) laws, or relying on job hopping for wage increase.<p>I have seen companies turn down good candidates for jobs too many times, as a result of speculating that the candidate is too good (they'll expect to get paid more). You don't even have to ask for high wages, you have to dumb down your resume and underplay yourself at some point if you want to be considered for a majority of non-junior roles these days, just so you get a shot at an actual interview and low-ball offer.
> And theoretically speaking, women’s mass entry into the workforce shouldn’t produce an overall decline in wages. Just like immigration or a baby boom, women’s entry into the workforce is both a positive labor supply shock and also a positive labor demand shock at the same time — when women earn more, they spend most of what they earn, on things that require labor to produce.1 So we shouldn’t expect the addition of women to the workforce to hold down wages.<p>The reason that excess labor doesn't drive down wages is because they spend those wages on <i>rolls dice</i> labor intensive things? This makes no sense in any direction.<p>I'm reading through the beginning, which was a little sus, then jumped to the end and loathe to read most of this handwaving.
No mention of Robert Reich's work or the politizane infographics chart. [0] <i>Sigh</i><p>0. <a href="https://youtu.be/QPKKQnijnsM" rel="nofollow">https://youtu.be/QPKKQnijnsM</a>
"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"<p>The argument isn't that any of this began with NAFTA. The argument as I've always understood it was that it began as the Neoliberal project which started in the late 60s, and early 70s.<p>The 1973-1994 period wasn't before globalization. It was the period where the groundwork was laid to make labor vulnerable to the type of globalization that neoliberals wanted.<p>The threat of capital flight for example was already being used to attack workers.<p>The breakdown of the Bretton Woods system was the start which aligns perfectly with the time period.<p>Noam Chomsky on the topic<p>"Bretton Woods restrictions on finance were dismantled, finance was freed, speculation boomed, huge amounts of capital started going into speculation against currencies and other paper manipulations, and the entire economy became financialized.<p>The power of the economy shifted to the financial institutions, away from manufacturing. And since then, the majority of the population has had a very tough time; in fact it may be a unique period in American history. There’s no other period where real wages — wages adjusted for inflation — have more or less stagnated for so long for a majority of the population and where living standards have stagnated or declined." - <a href="https://chomsky.info/20090210/" rel="nofollow">https://chomsky.info/20090210/</a><p>So we start off with an flawed view of the world, and then we move forward with the argument to explain it through other means.<p>The 1973-1994 wage stagnation isn't a "mystery" caused by a patchwork of unrelated events. It's a direct consequence of a fundamental, politically driven shift in the economic regime, specifically the dismantling of the Bretton Woods system in the early 1970s and the subsequent financialization of the economy and deregulation.
Weird that the author doesn't talk about the expansion of the labor force with more women coming in in the 1970s, nor also the baby boom expansion that happened at the same time.<p>More workers vying for the same jobs--supply and demand driving down labor costs?
Monopolies.<p>Why would that be hard to understand? When companies don't need to compete for your labor they won't.<p>Also it's not just wages. The entire market is stagnant. Innovation has ground to a halt and billions are poured into wasteful deadend technologies.
The author states that globalization began in 1994 with NAFTA.<p>That seems either extremely naive or intentionally deceptive.<p>Globalization began in 1972 with the opening of China.<p>Which of course perfectly lines up with the stagnation of American wages.<p><a href="https://en.m.wikipedia.org/wiki/1972_visit_by_Richard_Nixon_to_China" rel="nofollow">https://en.m.wikipedia.org/wiki/1972_visit_by_Richard_Nixon_...</a>
The broad answer is well known: governmental capture allowed via multiple mechanisms for the near-total capture of real productivity gains to be collected by the wealthy.<p>This as most here can imagine allowed via recurrent acceleration for the profound wealth inequality we experience today, and <i>directly</i> produced our current collapse of democracy into literal kelpto-oligarchy backed by overwhelmingly powerful surveillance.<p>The 1% perceived and perceive no self-interest in a rising tide.<p>Now that hunter-killer machines both online and soon off shall reliably keep what people are still needed at bay, why would they?<p>I wish this were hyperbolic.<p>Neither diagnosis nor prediction is.
I truly do not understand how Noah Smith, a truly vapid and frankly unintelligent writer, makes it to the front page of this website so often. His writing goes whichever way is soothing to those with money and power.
Because wage stagnation is literally the Federal Reserve policy for the last 20 years.<p>The fed treats wage growth as a leading indicator inflation -- even though anyone with a brain knows that wages are the last thing to go up in an economic cycle, so if it's anything it must be a trailing indicator -- so when wages start to rise up the fed responds by increasing interest rates. Raising interest rates kills wage growth, as intended.<p>tl;dr: slam the economy every time wages start to go up for 20 years -> "why haven't wages gone up in 20 years" surprise pikachu face
Technology and automation likely lead to the lion's share in productivity increase. Thus we have seen at least one mode of tech wages that focus on creating higher productivity systems staying strong while many other segments stagnate.<p>Meanwhile I don't see any evidence education in the past 20 years in the US has yielded a significantly higher quality and efficiency of candidate.<p>If you want more money all else equal you have to bring something more to the table. If all you bring to the table is being able to use a more efficient machine it's not clear why your wage would elevate rather than the value of the machine (capital) elevating. Merely having as good an education as the guy 20 years ago isn't going to cut it.