According to the Christian Science Monitor, US wages (adjusted for inflation) for non-management employees in private industry peaked in 1973.
Last year, these average weekly wages were $116 lower (~$6,000 less a year) than they were 30 years ago. What’s keeping the average family above water is having two wage earners.
The boom years of the bubble led to a bust for CEOs as well rank-and-file workers (many still out of work). Forbes reporeted this week that CEO compensation for the top 500 companies in the US was up only 8 percent last year; average compensation was $16.5 million. The range was $39 million to 148 million with seven unreported (including Cisco, Apple and DirecTV).
Business Week pegs the increase at 9.1 percent for the largest 365 companies. It reports that in “1982, the ratio of CEO pay to the wages of an average worker stood at 42 to 1. Today, it is beyond 300 to 1.” Still looking for a data point for 1973 to match the peak in nonmanagement job wages.
However, the gap between those in the 90th percentile and those in the 10th is also at an all time high. This trend began in 1979, when the two average weekly wages differed by a factor of 3.7. Today, they differ by a factor of 4.7.
Contrast that with the ’50s and ’60s when the wage gap shrank. Place some of that reversal on lost manufacturing jobs. Some experts also point to the ever-widening gap between senior management compensation and that of the average employee — whether in white collar work (technology) or industry.
The Institute for Policy Studies and United for a Fair Economy reported in 2000 that
CEO pay jumped 535% in the 1990s, dwarfing the 297% rise in the S&P 500, 116% rise in corporate profits and 32% increase in average worker pay (not adjusted for inflation). The pay gap between CEOs and the President of the United States has grown from 2:1 to 62:1 since 1960.
If average pay for production workers had grown at the same rate as it has for CEOs during this boom, instead of barely outpacing inflation, their 1999 annual earnings would have been $114,035 instead of $23,753. If the minimum wage had risen as fast as CEO pay, it would now be $24.13 an hour, instead of $5.15.
1 reply on “Wages peaked in ’73”
We aren’t better off now than we were thirty years ago.
The Wired Pen points to a Christian Science Monitor piece that reminds us that wages for working people have declined over the years since 1973 – and that we are keeping our noses above water by having more than one…