Bailout

Chart of the day, US earnings edition

By Felix Salmon

The jobs report this morning showed average hourly earnings increasing by 1 cent to $22.87 over the past month; that brings weekly earnings up to $782.15, on average, up 2.3% on last year. That’s a modest improvement, but an improvement all the same.

But Michael Greenstone and Adam Looney decided to take a step back, and look at median earnings across the population overall, rather than just in the working population. The resulting picture, especially for men, is pretty gruesome:

They write:

This analysis suggests that earnings have not stagnated but have declined sharply. The median wage of the American male has declined by almost $13,000 after accounting for inflation in the four decades since 1969. This is a reduction of 28 percent!

There’s a lot going on here, but a large part of it is that between 1970 and today, the share of men without any earnings at all increased from 6 percent to 18 percent. Many of those men are in prison, but a lot more are simply discouraged.

The blue line in this chart can be read as showing the competitiveness of working-class Americans in an increasingly globalized economy. It’s in secular decline, it’s not coming back, and it has been exacerbated greatly by the loss of 12 million jobs over the course of the Great Recession. Those jobs aren’t coming back, either. The US is going to have to create millions of new jobs going forwards. But it’s also going to have to look after the growing ranks of the unemployed — those who are looking for work, to be sure, and also the growing ranks of those who don’t even bother any more.

Full post as published by Macroprudential on March 04, 2011 (boomark / email).