Chart of the day: real hourly earnings

By Edward Harrison On Jun 20, 2008

Hourly wages in the U.S. have not kept pace with inflation in the past 35-40 years. To the degree that U.S. households have been able to maintain higher real household earnings, it is all due to the influx of women into the workforce.

Real hourly earnings peaked at $20.30 per hour in January 1973, on the eve of the first oil shock. Over the next 22 years, it plummeted to $16.39. It now stands at $17.94, almost 12% lower than at its peak 35 years ago. In May 2008, hourly earnings growth y-o-y stood at -0.62%.

This unabated trend of income decline for the middle class during the last generation should give one pause about the macroeconomic policies in effect during that time period.

Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.