An Unhappy Labor Day: Wages are falling across the U.S.


Perhaps the most important economic trend of the past fifty years is also one of the least discussed. Wages are falling. In the 1950s and 1960s, wages grew as the economy grew. But in the early 1970s, wages for the majority of the population became uncoupled from economic growth.

First, for those unfamiliar, a quick explanation of the difference between mean and median wages. Mean wages are determined by adding everyone’s wages and dividing by the number of people. But one Bill Gates can have a big influence on mean wages. If you want to know how the ‘average’ worker is doing you probably don’t want to look at the mean, since that’s heavily influenced by both very high earners and very low earners. Instead, the median is the person who would be in the middle if we lined everyone up according  to their wages. Fifty percent make more than…

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