Men's Earnings Haven't Just Stagnated Over Past 40 Years--They've Fallen
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Catherine Crampell at The New York Times Economix blog pointed to a disturbing article Thursday. It shows that full-time male workers in the United States were making less in real, that is, inflation-adjusted, dollars in 2009 than they were in 1969.
But the picture is even worse than that. When you take into account all men aged 25-64, whether they are working full time or not, they are making far less in real dollars in 2009 than they were four decades ago. Unsurprisingly, the less education they have, the worse off they are. The chart above shows just how bad it is.
The bottom-line: Wages for men have not just stagnated over the past four decades, they've slipped. And this is true regardless of education.
These data come from an article by Michael Greenstone and Adam Looney, both of the Brookings Institution and the Hamilton Project, the latter founded in 2006 by Robert Rubin to set forth an agenda of centrist economics for Democratic administrations to adopt. They write:
Over the past 40 years, a period in which U.S. GDP per capita more than doubled after adjusting for inflation, the annual earnings of the median prime-aged male has actually fallen by 28 percent. Indeed, males at the middle of the wage distribution now earn about the same as their counterparts in the 1950s! This decline reflects both stagnant wages for men on the job, and the fact that, compared with 1969, three times as many men of working age don’t work at all. [...]
Standard economic theory tells us that it is a consequence of reduced earnings opportunities and/or a greater desire to spend time out, broadening global markets brought opportunities that increasingly educated American workers raced to embrace. This resulted in steadily rising living standards, generations of children who out-earned their parents, and a thriving middle class.
While some say that the change could be from people—men, in this case—changing their life-styles out of a desire for more leisure or because they prefer to have their spouse bring in the cash while they take care of the kids or watch day-time television and eat bon-bons, Greenstone and Looney say the evidence points to the "primary cause" as being lost opportunity.
That loss is far greater for men with less education. Forty years ago, a college degree bought a man, on average, a lifetime income 55 percent higher than for his counterpart with only a high school diploma. Forty years later, the gap had more than doubled to 116 percent. We're familiar with many of the reasons for this. Technological change, globalization that has shifted jobs requiring less skills to emerging economies overseas, higher productivity from automation and the arrival of the "knowledge age" have all made it tougher on men without a degree. Those without a high school diploma? Well, they're paddle-less up the proverbial creek. And it seems to be getting worse.
Labor-market dropouts are more likely to be low skilled and less educated: nonemployment among men without high school diplomas increased by 23 percentage points (from 11 to 34 percent) and among those with only a high school degree by 18 percentage points (from 4 to 22 percent). Thus, the biggest declines in employment occurred among those groups that also had the biggest declines in market wages, suggesting the same economic forces may be at work. [...] What appeared as stagnant earnings for workers is really an outright decline in wages for the median men of working age. The median wage of the American male has declined by almost $13,000 after accounting for inflation in the four decades since 1969. (Using a different measure of inflation suggests a smaller, but still substantial, drop in earnings.) Indeed, earnings haven’t been this low since Ike was president and Marshal Dillon was keeping the peace in Dodge City.