I contend the common belief in wage declines, stagnation and gaps are based on false assumptions. Ignoring facts, falling victim to politically motivated statistics. Most Americans are all in with this negative and inaccurate concept.
Through it all, these people forget the concept of quality of life, life expectancy, amazing health care, travel holidays, plentiful food, advances in technologies that provide luxurious life styles - all benefiting the middle class, as well as all wage classes.
I discussed aspects of these thoughts in a separate blog about widespread negative thinking and the lack of optimism about the future of the world.
But here, I am trying to address the specifics of wages. Sometimes I think people simply don’t understand statistics; or forget it a minute after taking their University test. Saying wages are lower now then in the past is like comparing apples and oranges. All the reference points change over time.
For example; in 1990 United States had 250 million people. Since then, we have added 100 million people to the equation predominantly due to immigration of people with limited skills. Then we do a wage calculation; magic it’s lower in 2019. Of course genius!!! The stat shows almost nothing but politics.
Let’s propose that suddenly in 2020, all the citizens of Mexico and Central America and South America were combined with United States. Of course the graph would all point down...but it would be comparing apples and oranges.
When massive immigration: both legal and illegal occur; downward wage pressures will always swamp any inflation pressures or economic growth numbers. This is totally different then a true wage gap or wage decline. It’s is more honestly thought of as wage growth for the unskilled lower working class — not a decrease for the middle class !!! In fact millions and millions of people have been added to the middle earning classification. And millions more have joined the wealthy classification.
The honest method of comparing the wages is to track separately the individuals from a specific wage class over time. I believe this method would provide a totally opposite conclusion about wages.
Efficiency of food production, instantaneous communication, efficiency of hundreds fold, widespread travel all must be considered. These advances lower the cost basis of all commodities; making downward wage pressure inevitable while using static dollar based thinking.
The middle wage statistics are better looked as income increases by the low earners entering the mid earning ranges. While the upper middle earners have climbed up the ladder to the lower wealthy classifications.
Again; this idea is a positive view. Not the popular negative thinking that rules media and socialist beliefs. For these negative thinkers, they can only accept their personal success is the exception ... that most others are downtrodden and not progressing ... and that the cause is those Rich Republicans stealing from the poor.
Political based and misinterpreted statistics appear to rule the world.
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