The point in history when our present decline in wages began...

[kentuck]

... was during the Carter Administration when we had the high inflation and they were debating how best to handle it? This was before Volcker decided to raise interest rates extremely high as an incentive to keep people from borrowing money. President Carter requested the large unions of this country to refrain from any wage increases while we were fighting the battle against the inflation.

When Reagan came into office in 1981, he busted the PATCO union and created the most unfriendly atmosphere for workers in our lifetimes. Workers were never more fearful of losing their jobs and never finding another. This was when the present class war against the working and middle class began.

This chart shows the wage increases vs the productivity of workers since the mid 1970's:

[The2ndWheel]

1. The world started to open up more in the 70's

More access to more people. Advances in computers made people more productive, but also less needed as well.

I know we want it to be different, since we're talking about people, but everyone wants to get more bang for their buck. If productivity goes up with wages flat, why would the people in charge pay more? Because they want to be nice? If profit goes up whether or not more Americans are able to buy anything, what would make them pay people more? There's no reason to.

[kentuck]

2. Something else that happened during the 70's were the first oil embargoes...

The first embargo was during the Ford Administration after Watergate. There was a fairly severe recession. The next time it happened was during the Carter Administration. It shocked the economy of our country. It drove up the price of everything. That is where most of the inflation problem was generated. Computers that affected our productivity actually came around a bit later, most especially during and after the Clinton Administration.

[appal_jack]

4. Also deficit spending throughout the Vietnam War.

I'm not against deficit spending per se (would gladly support it for good infrastructure projects such as high speed rail, etc.), but Nixon's choice to empty the nation's treasury for an unnecessary war against a nation that did not attack us was a poor one. LBJ also bears considerable responsibility for these errors.

k&r,

-app

[kentuck]

8. True.

A big part of the inflation.

[hedda_foil]

16. And I'm convinced that Nixon's taking the currency off even a partial gold/silver backing caused

Runaway inflation with a stagnant economy. At the same time, OPEC stretched it's muscles.

[lumberjack_jeff]

3. I'm old enough to remember when inflation was called "a wage and price spiral"

Prices still go up, but wages not so much.

[Recursion]

7. Prices barely go up at all

inflation has been kept too low, frankly

[ed_shaw]

5. Post war inflation

My understanding is that inflation often follows war, even for losing sides. In America, we definitely see the spirit of invincibility that crept into the celebration. We were all things to all people, still are, but under a vastly different balance sheet. It is amazing how many people do not believe that debt will ever catch up with America, and also think that one party has it right while the other does not.
That point in time on the graph also coincides with about the time foreign investing became popular, globalism. Just sayin'

[Recursion]

6. The lower line was going down before the late 90s, and going up after

No idea why you keep failing to acknowledge that and pretending that 1975-1995 was better than 1995-2015.

[kentuck]

9. You fail to see the trend line?

Nobody is "pretending" anything. The top line is productivity and the bottom line is wage compensation, just as the graph shows. I don't know what you are looking at??

[Recursion]

10. Look at the direction of the compensation line

It's going down between 1970 and 1995, and up after 1995. The size of the gap doesn't really matter; the direction of the compensation line does (ie, going up means workers are making more).

[kentuck]

11. Workers wages did go up minimally during Clinton years...

They have since declined again.

The important point of the graph is the "difference" between the wages and productivity. For many years, wages were tied to productivity. Your point does not explain the discrepancy.

[Recursion]

12. No, that's really not what's important

The wage level is what matters

[kentuck]

13. No, they are both important...

Because that is the primary indicator of wealth disparity that everyone talks about.

[Recursion]

14. Not necessarily

The gap can go to profits, or it can go to lower prices.

[jeff47]

15. The gap can go to sequined ukuleles. But instead of guessing where the gap went

we actually have history. It didn't go to lower prices.