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productivity vs. wages chart
The Department of Labor reported Monday that productivity in the nonfarm sector of the economy rose at an annualized 3.0 percent in the third quarter. Reuters reports:
Productivity rose at a 3.0 percent annual rate after increasing at a 1.8 percent pace in the second quarter, the Labor Department said on Monday, driven by a 4.7 percent rise in output. [...]

Unit labor costs—a gauge of the labor-related cost for any given unit of output—fell at a 1.4 percent rate in the third quarter, roughly double the originally estimated fall, underscoring the lack of wage-related inflation pressures in the economy. Unit labor costs had risen at a 2.0 percent pace in the second quarter.

There is another way to label that lack of wage-related inflation. It translates, as it has for more than three decades, into wage stagnation. As we've seen for the past 35 years, productivity gains have, to put it mildly, not been equally shared. Since the turn of the twenty-first century, growth in wages has been flat. And that's been worse recently. The real (inflation-adjusted) median wage as measured by the Census is nearly $1,000 less than it was in 2007. Lawrence Mishel and Heidi Shierholz noted recently:
• According to every major data source, the vast majority of U.S. workers—including white-collar and blue-collar workers and those with and without a college degree—have endured more than a decade of wage stagnation. Wage growth has significantly underperformed productivity growth regardless of occupation, gender, race/ethnicity, or education level.

• During the Great Recession and its aftermath (i.e., between 2007 and 2012), wages fell for the entire bottom 70 percent of the wage distribution, despite productivity growth of 7.7 percent.

• Weak wage growth predates the Great Recession. Between 2000 and 2007, the median worker saw wage growth of just 2.6 percent, despite productivity growth of 16.0 percent, while the 20th percentile worker saw wage growth of just 1.0 percent and the 80th percentile worker saw wage growth of just 4.6 percent.

• The weak wage growth over 2000–2007, combined with the wage losses for most workers from 2007 to 2012, mean that between 2000 and 2012, wages were flat or declined for the entire bottom 60 percent of the wage distribution (despite productivity growing by nearly 25 percent over this period).

• Wage growth in the very early part of the 2000–2012 period, between 2000 and 2002, was still being bolstered by momentum from the strong wage growth of the late 1990s. Between 2002 and 2012, wages were stagnant or declined for the entire bottom 70 percent of the wage distribution. In other words, the vast majority of wage earners have already experienced a lost decade, one where real wages were either flat or in decline.
This lost decade for wages comes on the heels of decades of inadequate wage growth.

• For virtually the entire period since 1979 (with the one exception being the strong wage growth of the late 1990s), wage growth for most workers has been weak.

Put another way, the bottom 10 percent of the working population has seen its real wages fall 5.9 percent since 1979. The upper 5 percent has seen its wages rise by 39 percent in the same period.

Originally posted to Daily Kos Labor on Mon Dec 16, 2013 at 09:08 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  Maddening. (14+ / 0-)

    We've got to do something, somehow, to end this wage stagnation. It'll kill us as a first world nation.

    "Much of movement conservatism is a con and the base is the marks." -- Chris Hayes

    by raptavio on Mon Dec 16, 2013 at 09:20:27 AM PST

  •  The only trickle down anyone can feel (12+ / 0-)

    Is corporate America taking a leak on its workers.

  •  I'm glad you point out that this (22+ / 0-)

    trend has been going on since 1979.  It's disappointing that it has continued under President Obama.  It also should be pointed out that the 60s and 70s, as good as they may look to some now, were no golden age.  There still was a lot of poverty.  

    It seems that the white working and "mid-level professional" class have fallen from their somewhat privileged positions from that era.  For a time, some could enter the middle and even upper middle class.  

    I look to 78 with the tax revolt, although it was along trend.   Certain relatively privileged whites bought into Republican ideology that their taxes were going to give "free money" to "black and brown freeloaders."  Identifying with the upper class, these whites collaborated in the destruction of their own privileged position, falling into a proletariat that is no longer even industrialized.   The service industries bear some resemblance to a servant class.

    It seems that a rainbow working class that sees it won interest is the necessary first step.   Perhaps we are closer, but it still seems far away.

    I am glad that presidents and popes are talking about equality.  It helps lead awareness.  Actions would be nice also.  

    Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

    by TomP on Mon Dec 16, 2013 at 09:22:15 AM PST

    •  I'd expand your thoughts to note that Democrats (12+ / 0-)

      as party have been virtually silent about this for 30 years. And I'll be blunt; those that have suddenly found religion about wage inequality I don't trust either. You were either for regulation of capitalism and a strong middle class from the get-go, or you were duped by Reaganism like everybody else.

      The only way this problem is fixed is hosing out the party top to bottom. The Third Way rot has killed us.

      •  Problem is that Reaganism (0+ / 0-)

        Sounded good at first.

        Who wouldn't want the lazy people on social assistance programs to have to get a job? The issue was that too many people forgot that the people on social assistance programs were, by and large, working.

        My aunt was not working for a short period until her children were in school, then she had to get a job of her own.

        Problem was that 'the job' was nowhere near enough to makeup for the other things they tried to take away from her and her children because she had a job, therefore she was a ping-pong ball relying on relatives to help her pay rent and other things.

        Our minimum wage today is the real bottom-line issue however. Too many people think that the minimum wage is too high and that if we went to China-esque wages, those jobs would instantly come back to America.

        No, not unless we also got rid of our environmental protection laws, which are too lax in some areas.

  •  30 yrs of productivity & they put you on day shift (8+ / 0-)
    There is another way to label that lack of wage-related inflation. It translates, as it has for more than three decades, into wage stagnation. As we've seen for the past 35 years, productivity gains have, to put it mildly, not been equally shared. Since the turn of the twenty-first century, growth in wages has been flat. And that's been worse recently. The real (inflation-adjusted) median wage as measured by the Census is nearly $1,000 less than it was in 2007.

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013

    by annieli on Mon Dec 16, 2013 at 09:35:12 AM PST

  •  My children haven't got a frikkin chance (6+ / 0-)

    In their mid thirties now...Between non-living wage jobs for one, and immense student loans for the other.
     I think Willy Sutton was right.

    Join the Koskraft Group Koskraft

    by meagert on Mon Dec 16, 2013 at 09:49:20 AM PST

  •  The problem is that business models (14+ / 0-)

    see wage stagnation as a positive outcome.  

    Words can sometimes, in moments of grace, attain the quality of deeds. --Elie Wiesel

    by a gilas girl on Mon Dec 16, 2013 at 09:55:45 AM PST

    •  and so does (5+ / 0-)

      our government.  Immelt of GE as this administration's job czar and bankster's running the economy, makes all the rhetoric of economic inequality,  insult to injury. MB's sig line comes to mind when ever the Third Way Dems. start catapulting  populist economics. Sadly these so called Dems. own and run our party. The political speeches and rhetoric  are in no way connected to their agenda and policy.  Classic double speak that requires one to double think and belies reality. 'Victories for compromise' with who and for what?    

      •  People have forgotten the past (1+ / 0-)
        Recommended by:

        All the shit that went down in the early 20th Century, with strikes, Pinkertons, corrupt politicians, the rich looting the economy, the meteoric rise of FDR, the hard-won labor reforms, the banking reforms, the middle class society that rose up out of this. All undone. We're right back at 1900 now.

        Join Essa in a revolt against the gods. Continue the fight, Causality.

        by rbird on Mon Dec 16, 2013 at 12:05:32 PM PST

        [ Parent ]

  •  Between the banksters' crashing the economy (4+ / 0-)

    ..and stubborn unemployment numbers due to a variety of reasons (off-shoring and automation being probably biggest) - it seems as if the wage reset button has been pressed.

    $60,000 a year jobs today pay $30,000 and desperate people are "glad" to have them.

    We need a real paradigm shift and some leadership out of the hole that CEOs, bankers, and horrible politicians tossed us into

    Or the 99% will stay truly and completely screwed.

    Please support The War on Christmas. Do it for the Reindeer Troops.

    by Anthony Page aka SecondComing on Mon Dec 16, 2013 at 10:04:47 AM PST

  •  I think I read yesterday that the median wage (5+ / 0-)

    is lower today than anytime since either 1995 or 1998.

    How's that for progress?

    Through early morning fog I see visions of the things to be the pains that are withheld for me I realize and I can see...

    by Keith930 on Mon Dec 16, 2013 at 10:05:02 AM PST

  •  Yeah, sometimes you can get more work out (7+ / 0-)

    of a horse by whipping it. And sometimes you can get more work out of people by making them fear losing their jobs.

    The Oligarchy have exactly the economic conditions they want - through fear, people being reduced to little more than beasts of burden.


    "We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." - Louis Brandies

    by Pescadero Bill on Mon Dec 16, 2013 at 10:07:24 AM PST

    •  Which is why we need STRONG worker protection laws (1+ / 0-)
      Recommended by:
      Pescadero Bill

      And some high-up CEO's and CFO's being made to do the 'perp walk' on camera when they are found to be Union-busting or threatening their employees with the loss of their jobs if they will not take slave wages.

  •  It all comes down to tax fairness (6+ / 0-)

    We have spent the last 40 years systematically changing the tax code so that it's not tax-efficient to reward labor, but it is tax efficient to engage in inefficient and destructive rent-seeking and wishful, almost Messianic belief in rock-star CEOs.

    If that isn't a recipe for disaster in a market economy, I don't know what is.  The system is set up to encourage the CEOs and directors to line their pockets and waged labor to opt out.  And that's what's happening.

    Restore the Eisenhower-era tax code, and you might see a real recovery.  Restore the Nixon-era one, and you might at least see stabilization.  

    The one we've got now is not fit for our people.  Maybe it's fit for purpose, at least the purpose the Beltway and Wall Street folks have in mind for it.  But did you ever trust rich and powerful people who could not see beyond the ends of their noses?

    •  If you really want to irk someone who defends (4+ / 0-)

      the status quo, and who screams about "socialism" when government gets involved, just point out that the many tax code changes that have taken place during and since Reagan has amounted to "a massive redistribution of income" from the middle class to the upper echelons of our society.

      Stay a safe distance while their heads explode.

      The most violent element in society is ignorance.

      by Mr MadAsHell on Mon Dec 16, 2013 at 10:24:41 AM PST

      [ Parent ]

      •  "Nyah-nyah, can't hear you" with fingers in ears (4+ / 0-)

        I've tried that, with charts and graphs to make things easy and clear to Fox-watching neighbors and acquaintances. It simply does not get processed. Their brains reject what they see and hear and they claim the facts are wrong. Their worldview is 100% set in stone: personal taxes are at historic highs, welfare moochers are robbing them blind, rich people create all jobs, trickle-down has worked incredibly well, unions are the most powerful force (for evil) in politics and lack of jobs is solely due to illegal immigrants. It's faith based reality, not fact based and I have no idea how to get through to them.

        •  Property taxes . . . (0+ / 0-)

          Part of the problem with the Fox-bots is they don't disaggregate all their tax bills.  And one of the results of the Ronald Reagan School of Public Administration is that costs don't go away, they simply get dumped on local government and shoved into property tax bills.   It's a remarkable gig by the right; discredit government, financially stress government,  sow distrust in progressive taxation, and convince the lunch-pail-and-Bible portion of their base through personal experience that taxes are higher than they actually are.  All this stuff interacts to create distrust in government and in taxation.

          Don't forget ideology either.  The worst line from his 1981 inaugural, "government is the problem."

          You simply need to show semi-reasonable people how wrong these sentiments are, while letting the hardcore cases go beyond acting out Winston Churchill's largely correct observation about Americans . . . they do the right thing after exhausting all the other options.  Just bear in mind that he's speaking collectively, so that grim assessment is simply us getting far enough beyond 51 percent to have an impact in our national and state capitals; it still doesn't cover everyone.  The Know-Nothing right goes on with faith-based politics.  Always has.  Always will.

    •  And wage fairness. If you don't start (4+ / 0-)
      Recommended by:
      Eric Nelson, rbird, jbsoul, Lerianis

      with a fair (and living) wage to begin with, lower taxes won't help.

      We need both the $15 min wage AND some reasonable caps on executive income, as well as full income taxation on hedge fund managers and investment income.

      Trust, but verify. - Reagan
      Vote, but Occupy. - commonmass

      When the rich have tripled their share of the income and wealth yet again, Republicans will still blame the poor and 3rd Way Democrats will still negotiate.

      by Words In Action on Mon Dec 16, 2013 at 11:06:01 AM PST

      [ Parent ]

  •  free trade agreements and trickle down economics (4+ / 0-)

    Growth for the sake of growth is the ideology of the cancer cell. --Edward Abbey

    by greenbastard on Mon Dec 16, 2013 at 10:12:49 AM PST

  •  fruits (3+ / 0-)
    Recommended by:
    Eric Nelson, rbird, happymisanthropy

    Oh  the fruits of capitalism, even while it takes Americans to third world status they still love it and defend it like it is their bible not to be questioned.

  •  It's been going on for 40 years (5+ / 0-)

    Productivity and compensation photo compensation_productivity_zps3610680e.jpg

    IMO since Carter cut the top tax rate to 28% from as high as 98%.  Under Reagan and HW Bush it got going and it has continued unabated since then.

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Mon Dec 16, 2013 at 10:18:40 AM PST

  •  The one-percenters are wage thieves (8+ / 0-)
    The weak wage growth over 2000–2007, combined with the wage losses for most workers from 2007 to 2012, mean that between 2000 and 2012, wages were flat or declined for the entire bottom 60 percent of the wage distribution (despite productivity growing by nearly 25 percent over this period).
    I'm assuming that most of the value of the 25 percent increase in productivity went to the one-percenters who have their boots on the throat of our nation, since the majority of workers saw no increase in income from their 25 percent more productive labor from 2000 to 2012.  I wonder how many hundreds of billions of $ the one-percenters have raked off the top during this period.  I also wonder how long the rest of us in this country are going to allow this legalized thievery to persist.
  •  check this doc out. (2+ / 0-)
    Recommended by:
    Words In Action, rbird

    this documentary left me speechless at times.

  •  any thoughts on the variation in productivity (0+ / 0-)

    by sector? (manufacturing, durable, non-durable, etc?). I looked at the detailed report and couldn't exactly determine if its one sector or another.

  •  Ok, teach me. (1+ / 0-)
    Recommended by:
    Eric Nelson

    So wage growth is flat, but productivity keeps increasing.  I've wondered how productivity is measured and how we keep squeezing more productivity out of the same people?  Is there a productivity ceiling or can we keep going with that?  Won't people revolt at some productivity threshold?

    I already frequently work 80 hour weeks, how much more can I do before I can't do anymore?  Seems to me that productivity would stop increasing at that point?

    I want to live in a world where George Zimmerman offered Trayvon Martin a ride home to get him out of the rain that night. -Bishop G. Brewer

    by the dogs sockpuppet on Mon Dec 16, 2013 at 10:33:03 AM PST

    •  A large portion of that increase in productivity, (4+ / 0-)

      ...which has been the case since machines were introduced, is technology driven.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Mon Dec 16, 2013 at 11:26:33 AM PST

      [ Parent ]

      •  But one year productivity increases can't all (0+ / 0-)

        be automation, since technology isn't changing and being implemented that fast, right?  They are squeezing more out of individuals as well.

        I want to live in a world where George Zimmerman offered Trayvon Martin a ride home to get him out of the rain that night. -Bishop G. Brewer

        by the dogs sockpuppet on Mon Dec 16, 2013 at 02:10:52 PM PST

        [ Parent ]

        •  For sure they are. Having suffered in the '90s... (2+ / 0-)
          Recommended by:
          the dogs sockpuppet, jbsoul

          ...through management seminars where we were urged to tell our staffs to "work smarter, not harder" and "do more with less," I once silenced an entire room for 15 seconds by noting that if I quoted my already overworked staff one of those idiotic slogans, I would consider myself fortunate if the only repercussion was somebody taking a key to my car's paint.

          Don't tell me what you believe, show me what you do and I will tell you what you believe.

          by Meteor Blades on Mon Dec 16, 2013 at 03:21:59 PM PST

          [ Parent ]

  •  As long as (1+ / 0-)
    Recommended by:
    the dogs sockpuppet

    the poor and working class are quiet and complacent, nothing changes. When they strike, fill the streets, stop business as usual, and make the comfortable uncomfortable, things tend to change quickly. This is the utter failure and shame of the "left" in this country at the moment.

    •  This country really has a lot of sheeple. (1+ / 0-)
      Recommended by:

      Whatever the corporate giants have been doing to keep people complacent has been working amazingly well.

      I blame TV, but it's probably so much more than that.  Still I killed my TV years ago.

      I want to live in a world where George Zimmerman offered Trayvon Martin a ride home to get him out of the rain that night. -Bishop G. Brewer

      by the dogs sockpuppet on Mon Dec 16, 2013 at 11:03:59 AM PST

      [ Parent ]

  •  Call it what is: this is stealing from workers. (5+ / 0-)
  •  See Paul Krugman's latest column. (3+ / 0-)
    Recommended by:
    Words In Action, Eric Nelson, rbird

    Why Inequality Matters

    What do the pre- and postcrisis consensuses have in common? Both were economically destructive: Deregulation helped make the crisis possible, and the premature turn to fiscal austerity has done more than anything else to hobble recovery. Both consensuses, however, corresponded to the interests and prejudices of an economic elite whose political influence had surged along with its wealth.
    Basically, the 1% have used their wealth to buy politicians on the left & the right. That's how we have such folks as HRC being anointed as the D'd presumptive POTUS candidate for 2016. And PBO giving pretty speeches on income inequality while he secretly created the pro-corporate TPP. & Congress about to roll over on fast-tracking it.

    Warren is neither a Clintonesque triangulator nor an Obamaesque conciliator. She is a throwback to a more combative progressive tradition, and her candidacy is a test of whether that approach can still appeal to voters.-J. Toobin "New Yorker"

    by chuck utzman on Mon Dec 16, 2013 at 10:54:42 AM PST

  •  Think about this (1+ / 0-)
    Recommended by:
    Eric Nelson

    More people are living multiple generations under one roof.

    More people are choosing not to drive.

    There is a tiny house movement going on.

    Less people are going to the doctor.

    I believe that the conditions are right for us to start experiencing deflation.

    The right wants to tell us our current policies will cause inflation, which has never happened but then they also claim low interest rates are robbing the middle class of the incentive to save so they are also arguing for higher interest rates.

    I believe if we don't get a handle on this we are going to see declining expectations and deflation.

  •  Full employment is anathema to the GOP (2+ / 0-)
    Recommended by:
    jbsoul, Meteor Blades

    ..Excess labor is the goal and the easiest variable to control it seems because workers have less lobbying power than the corporations.   
    Resisting Republican Excess - Posted: 08/06/2013 9:51 am

    And quite contrary to contemporary Republican claims, private market forces, if left unmanaged by public policy, cannot be expected to fully fill the void left by inadequate private charity and curtailed public programs.

    Unregulated markets are not the panacea the Right would have us believe them to be: markets are only perfect allocators of resources if everyone operating inside them has equal purchasing power -- and that is certainly not how markets currently operate in unequal America.

    Not that this inequality should necessarily surprise us, for unregulated markets are great engines of both social inequality and economic instability.

     Market competition produces losers as well as winners -- so inevitably generating ever wider inequalities over time -- even as it inexorably falls victim to its own contradictions. The biggest of these is the tension in unregulated markets between the simultaneous imperatives of cheap labor and prosperous consumers.

     By seeking to restrain costs (especially labor costs) to win greater market share, each firm inevitably erodes the level of aggregate demand vital to keep levels of employment high and rising.

    Unregulated markets always settle at an equilibrium point -- the neoclassical economics so favored by Republicans is right about that -- but unregulated markets contain no way of ensuring that such an equilibrium will bring with it full employment.

    If full employment is the goal, governments have to act. A strong public welfare net and an economically-active government are not, therefore, barriers to rising and reliable prosperity for all, as Tea Party Republicans so often paint them to be. They are, on the contrary, essential prerequisites to that prosperity.

     - emphasis added

    This argument is using capitalists own arguments to demonstrate that the very market forces republicans believe necessary for the economy to reach an equilibrium prove that the "free market equilibrium" by the "conservative"/republican party  not only creates an excess labor pool but actually requires one to fulfill the goal of a "greater market share" and the bottom line: Profit

    The republicans agenda in every way seeks to lower the portion that labor receives from production.

    There is no truth. None. That the GOP agenda will ever build a stronger more prosperous middle class  workers - Not ever - it's a provable thing - so let's make sure people see that proof everywhere they look

    Thx MB

  •  Just a thought but (0+ / 0-)

    maybe now workers should stop being so productive, if their wages aren't to match.

  •  We are being systematically reduced to serfdom. (0+ / 0-)
  •  Pointed this out for years (0+ / 0-)

    That even the worst workers are producing more than the best workers did 20 years ago, yet they are only paid equal to or less than what the best workers did 20 years ago.

    Something has gone wrong with our economy and I personally point the finger SQUARE at a little thing called? Capitalism.

    Or more, capitalism without strong protections for workers and strong minimum wages that are indexed to inflation.

  •  How to explain this to idiots (0+ / 0-)

    Americans are, what, twice as productive as they were in 1980, while wages are down?  That's gibberish economist-ese to most people. This is what happened:

    You make your boss twice as much money as your parents did... but get paid less in return.  Does that sound fair to you?

    THAT is where 30 years of trickle-down has led us.

    Nobody deserves poverty.

    by nominalize on Tue Dec 17, 2013 at 05:19:49 AM PST

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