The $20 hourly wage, introduced on a huge scale in the middle of the last century, allowed masses of Americans with no more than a high school education to rise to the middle class. It was a marker, of sorts. And it is on its way to extinction…. Hourly workers had come a long way from the days when employers and unions negotiated a way for them to earn the prizes of the middle class — houses, cars, college educations for their children, comfortable retirements. Even now a residual of that golden age remains, notably in the auto industry. But here, too, wages are falling below the $20-an-hour threshold — $41,600 annually — that many experts consider the minimum income necessary to put a family of four into the middle class….I'm curious to know who those "many experts" are; I'm not familiar with the notion that $41K is the entry level to the middle class, and in hourly wage households, at least AFAICT, it's generally assumed that the wife works. Belle Waring asks:
Surely $20 an hour in the 70s would be $60 or so an hour now, adjusted for inflation? It makes a big difference to this article and the author has totally failed to explain the issue. ‘Fewer people of this class make even 1/3 as much per hour as they did 30 years ago’ is a very different message from ‘fewer people of this class make this inflation-adjusted wage.’ It seems clear the article implies the former but muddies the waters with the nominal wage, ironically further masking the dramatic decline of the blue-collar middle class.Er . . . she's got it backwards. They are inflation-adjusting the $20 wage--back to the 1970s. A $20 an hour wage in 1973 would be about a $100 an hour wage in today's dollars. Even if you think that the bygone industrial days were a halcyon era of plenty, this should flunk an elementary gut check. $100 an hour translates into an annual salary of about $200K a year in today's money. Yet per-capita GDP has more than doubled since 1970. I think the story's more than a little silly--hourly wages just aren't a very good way to organize most non-industrial workplaces, so enhanced manufacturing productivity sort of definitionally means that they'll fall. But it's not quite as silly as Belle seems to think.
This article available online at:
http://www.theatlantic.com/business/archive/2008/04/inflation-calculations-backwards-or-forwards/3280/
