Chart Of The Day: Whose Wages Are Stagnating?

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I’d been fooling around with Census data a bit over the last week. Here’s an interesting chart using Census Table P-36. Full-Time, Year-Round All Workers by Median Income and Sex: 1955 to 2010

Median income for full-time working men first hit 50,000 (in inflation adjusted 2010 dollars) in 1973, and it has been essentially flat ever since (breaking 50k for the second time in 2010.) However, the median income of full-time working women has gone up 35% since 1973. The percentage of full time workers who are women has also increased gradually throughout that time, from 30% in 1973 to 43% in 2010. (In absolute numbers, obviously both the number of male and female full time workers has increased significantly during the same period.)

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  1. Interesting how Mens’ real wages, which in cold hard fact are the historical standard since women have just that recently begun to enjoy improvement in pay across the board, have not changed since Nixon dislodged the dollar from that pesky Gold Standard. Yet, there’s tremendous growth when compared to the stable, productive 1950s. Fiat Money!

    I would venture to guess that Womens’ wages will plateau eventually.

  2. Does the push for women’s equality in the workforce act as a cap on male productivity and wages?

    An office of highly productive men must work extra hard to promote women, lest it be sued for discrimination. So why should the men work as hard, if they’ll be less likely to get promoted anyway?

    While sometimes it’s just bitterness to claim that less qualified women are promoted over more qualified men, I wouldn’t be surprised if this is indeed the case in many companies.

  3. Forgive all injuries.

    I agree with Kevin.

    I’ve been in the big corporate world since before affirmative action.

    In the old days, managers’ annual HR performance “ratings” had to contain a statement to the effect that “so-and-so actively supports the EEO program and treats all personnel fairly and equally.”

    Now, it’s the opposite. Corporations are required to discriminate (in employment, promotion) to ensure equal outcomes (“disparate treatment”/”effects tests rule” – accomplishments, education, experience, knowledge, skills be damned) for protected classes.

    In bank lending, they imposed Equal Credit Opportunity Act, CRA, Home Mortgage Disclosure Act, etc., and it’s all, “The bank doesn’t make enough affordable housing loans or loans to protected classes in “red-lined” areas! The government forces the highly-regulated to advance more loans and to hell with repayment capacity or any other credit decision factor.”

    Back to employment. HR needs to report its numbers. In promotions, that means minimally qualified protected class members are promoted over more highly accomplished white males. That leads to resource misallocations and inefficiencies, as Kevin indicates.

  4. Kevin J,

    If anything, I think the more accurate way to look at it is that because white males had such a big advantage to start with, once employment became more of an strict matter of supply and demand rather than preferences, white men found themselves overvalued compared to other people capable of doing similar amounts of work.

    Even that is massively over simplified, though. A lot of what has shifted during the last 40 years is who is doing what kind of work, who has what kind of education, and how much various kinds of work are worth. For instance, women now make up a majority of college graduates, which definitely was not the case 40 years ago. Also, you have traditionally male industries like construction and manufacturing struggling, while more traditionally female industries like health care and education are doing relatively well.

    While it’s true that if there is an office somewhere in which men honestly don’t think they’ll get promoted because of preferences, those men probably won’t work as hard, I can’t say that I’ve ever run into such an office.

  5. Another way to look at the wages is to consider them in the light of family breakdown. Married men tend to be the most productive, and with the decline in marriage that will manifest in lower male productivity and wages. Men paying alimony to ex-wives they now dislike or despise may have less incentive to earn.

    As for whether women are being promoted or hired in place of equal or more capable men, there are lots of incentives to do so.

    Many big companies have special women’s groups for networking purposes that aren’t available to men (and seem to be heavily feminist). Many government contracts have quotas for women-owned business and businesses with X percentage of women in management positions. If women aren’t men’s equals for a given position, then these structures are promoting less effective employees. If women are equal to men for a given position, then these structures give them the upper hand in the competition for jobs.

    I’m sure these pressures depend on the industry, too. An editor with a major local newspaper told me of the sinking feeling he gets when his hiring team heads to a diversity job fair knowing that he has to hire someone just on the basis of diversity. I wager feminist groups are more interested in news media, academia, government or law firms than IT or engineering fields.

  6. Here’s an example of how feminist policies pressure companies to hire women:

    Carrollwood hydrant project delayed by lack of women on crews

    So you have a company that could save $16,000 for a city contract and is racially diverse enough to meet other standards, but doesn’t have enough women skilled laborers.

    The contract will likely go to someone with better feminist recruitment policies, costing men their jobs, costing cities more money, and strengthening feminist economic and cultural power (which in the American context relies upon, and promotes, contraception and abortion).

  7. I agree that the idea of turning down a construction contracting company because they don’t have “enough” female workers is deeply silly (and I tend to be against racial or sex quotas in virtually all circumstances) — but color me skeptical that this sort of situation is responsible for much of the graph that I posted.

    First off, one of the things to keep in mind is that a graph like this shows aggregate data. It doesn’t mean that individual men do not get raises. Typically, a worker starts out making less and increases his income throughout most of his life. What this is looking at is: If you take the average all all workers (those in early career, mid career and late career, and spread across growing industries and dying industries) and you adjust for inflation, male wages have been fairly stagnant for the last 40 years while female wages have increased 35%.

    Now if one considers a couple basic facts, I think the logic of how something like this works will seem fairly obvious.

    1) Up until a gradual change stretching from the 50s through the 70s, married women were expected to stay home or at most work part time, not as many women went to college as men, women were often paid less even for doing the same work, and many careers were considered closed to women.

    2) During the 70s through the 90s, these trends pretty much all reversed: Women are expected to work full time even after marriage, women started going to college at the same rate as men (now more women graduate from college than men), women are generally paid the same for the same work, few to no careers are considered off limits for women.

    3) While, on average, certain abilities are stronger in one sex or the other (men tend to be stronger, women tend to be more empathetic, etc.) neither sex is massively more able than the other.

    If we accept these three points, it seems fairly obvious that over the last the number of Americans competing for many jobs has gone up 30-40% as more women have come into the workforce. When supply goes way up, you would expect that the price would not increase as rapidly. So with the percentage of Americans working going way up, and women having an equal chance on most jobs, you’d expect the average income of female workers to go up much more rapidly for quite some time, while you’d expect the average income of men to stagnate for a while.

    Think of it this way: 40 years ago, the pool of applicants for the best jobs was heavily male. Now it’s much more 50/50. Even if we assume no preferences and that women win no more than 50% of these jobs, the result is that the percentage of these jobs held down by men will go down. So while among workers over 55, most of the highest paying jobs might be held by men, for workers around 30 the split might be much more 50/50.

    Even given just that set of factors, you’d expect to see a patter such as what we’ve seen for about the length of a full career after we reached a point of fairly equal opportunity: Say, for about 30-40 years starting in the late 70s or early 80s.

    However, wider economic changes are probably throwing things off even more, since in point of fact there are different aptitudes and preferences for men and women, and those differences have tended to make certain fields more male or more female. Given that construction and manufacturing both tend to be heavily male, and that they’ve both been struggling a huge amount over the last while, this probably depresses the male average even more than we’d expect otherwise.

    Again, I don’t support quotas, and I think that examples like what you point out are pretty appalling. But I just don’t think that’s what’s driving the trend. And although I’ve run into the ineffective affirmative action hire from time to time, I’ve at least as often (if not more often) run into the ineffective male employee who everyone keeps transferring around because no one can get rid of him, or the ineffective but highly decorative female employee that some male manager hired over more qualified candidates because he likes to look at her during meetings. All of these types are frustrating to have to deal with, but I don’t really think any of them are so big a trend as to be driving our economic statistics or shaping our society.

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