The Most Important Economic Stories of 2013—in 44 Graphs

A record year for stocks. A meh year for wages. A weird year for Wall Street.
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Maybe it's just me, but the last few years are getting tough to tell apart. Imagine a quiz question:

Name that year where we threw obstacles in the recovery's way, but kept growing slowly; where Europe avoided both a disaster and a solution to its mess; and where China kept growing over 7 percent, but didn't rebalance its economy like it said it wants.

You'd be right to guess 2013. You'd also be right to guess 2012, 2011, or 2010.

So, to remind ourselves what did change in the last 12 months, we asked our favorite economists, journalists, and think-tankers for their favorite charts of the year. The stock market went on a tear, the labor market didn't, and Wall Street and Main Street came to terms with a New Normal. Without further ado, here are 37,000 words worth of charts to tell the most important stories of 2013.

The Year in Wages and Wealth: Stocks Up, Paychecks Flat

Ryan Avent, The Economist: The economic debate in 2013 was dominated by discussions of when the Federal Reserve should begin pulling back on support to the economy. Some economists focused on the unemployment side of the Fed's mandate, which sent mixed signals: the unemployment rate remained high, but the labour-force participation rate kept falling, suggesting to some that the economy was approaching full employment. Inflation, by contrast, was too low throughout the year.

I preferred to look at a measure that combined the two factors: growth in average hourly wages. If the economy were actually close to putting all willing and productive laborers to work, we would expect wage growth to rise steadily, indicating that employers were having to jack up pay to compete for scarce labor (and pointing to growing inflationary pressure). Instead, average wage growth has been flat and well below rates associated with full employment. While wage growth remains dormant, talk of tapering or tightening strikes me as premature.

Binyamin Appelbaum, New York Times: Wage stagnation may be our most important economic problem. Wages are supposed to rise with productivity. As workers produce more, it stands to reason that they will be paid more. But as you can see above, wages have lagged productivity since the 1970s.

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Derek Thompson, The Atlantic: The story of the year was the labor market vs. the stock market. It was a meh year for the former. It was a banner year for the latter. And that made it a banner year for the top 10 percent of the country, which holds about 80 percent of all stock market wealth.

Ben White, Politico: Household net worth surpassed its nominal all-time high this year. It's "probably already taken," White told us via Twitter, "but as far as hope for stronger 2014 this one on household net worth hitting record is my favorite."

Heather Boushey, economist, Center for Equitable Growth: Emmanuel Saez and Thomas Piketty's data charting the fall and rise of income shares of top earners are well known at this point. The past thirty years have seen the incomes of those at the top explode and the top 1 percent received 95 percent of the income gains from 2009 to 2012. With top earners now receiving as much as that group did during the Roaring Twenties, this chart is a reminder of just how inequitable our income distribution has become.

Jordan WeissmannThe Atlantic: You have to admit, there is something a bit crazed about America's minimum wage policy. Every so many moons, Congress battles over whether it's time for a hike. Eventually, Democrats win out. Then we let inflation eat away at its dollar value until liberals decide to pick up the issue again, as they have this year. And so you get the blue line below, the real value of the minimum wage zig-zagging, mostly downward, since 1968. Whether or not we end up raising the minimum wage, wouldn't it make sense to at least index it to the cost of living? After all, if we're going to have a minimum wage at all, shouldn't it remain the minimum?

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Heidi MooreThe Guardian: Here's why I love this chart: it nails the issue with the inequality at the center of our economy right now. Corporate profits are our only consistently rising metric of economic success. Everything else that matters is bumping along the bottom. Job openings have only modest gains, and nowhere near what we had before the crash. Personal income is stagnant. Unemployment is still absurdly high. That leads to the policy question: is it our goal as a country to fuel only corporate profits? Or do we have some other responsibility to the citizenry?

Mina Kimes, investigative reporter, Bloomberg: The top line in this chart shows no sign of abating (especially as shareholders continue to rally behind highly paid executives), but the bottom one has incited a movement. Over the last year, fast food workers across the country have organized a series of one-day strikes, drawing attention to a significant problem: Many Americans who work don't make a living wage. [Graph via EPI]

The Year in (Un-)Employment: A Big Scoop of Meh 

Cardiff Garcia, FT Alphaville: Although the data end in 2009, I found this graph powerfully descriptive given the prominence of inequality as an economic theme this year. The occupations along the bottom run left to right from the least-paid to the highest-paid. What the graph shows is that middle class employment is much smaller as a share of the employed labor force than it was three decades ago.

The top four occupations and three of the bottom four have increased their share of employment at the relative expense of the middle three. Numerous potential reasons have been offered for this change in the employment landscape—the particular nature and pace of recent technological advancement, globalization, the global savings glut and corresponding investment dearth, the incentive structure of corporations, policy deficiencies, or "merely" cyclical causes—but there is no consensus on this hugely important issue.

Jim Tankersley, Washington Post: As I wrote back in November, job insecurities have always been higher among low-income Americans, but they typically rose and fell across all levels of the income ladder. Today, workers at the bottom have drifted away, occupying their own island of in­security.

Adam Ozimek, Modeled Behavior: This is a useful reminder that there really is a remarkably strong consensus among economists that high-skilled immigration is beneficial to the average U.S. citizen, and the recent attempts to disprove a skills shortage are really beside the point. Of course a quota induces a shortage relative to what the market demands; what matters is that economists overwhelmingly agree this particular shortage is reducing welfare for the average U.S. citizen.

Brad DeLong, Center for Equitable Growth and professor at the University of California-Berkeley: As Jared Bernstein has written, "I've always thought the key test of the claim that lots of people were abusing the DI rolls when they could be working is the extent to which the DI rolls are countercyclical, meaning they go up when the economy goes down. What Kathy finds is applications [do line] up roughly with unemployment. But awards less so [unless you] squint."

Matt O'BrienThe Atlantic: It's been over four years since the recovery officially began, but there are still just under three unemployed people for every job opening today. That's a big improvement from where we were after Lehmangeddon, but it's still about as bad as things were after the tech crash.

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Matthew O'Brien

Matthew O'Brien is a former senior associate editor at The Atlantic.

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