Safe Mode: On
U.S. Standard of Living Has Fallen More Than 50%

NEW YORK (Bullion Bulls Canada) -- In writing about the relentless collapse of Western economies, I frequently point to "40 years of plummeting wages" for Western workers, in real dollars. However, where I have been remiss is in quantifying the magnitude of this collapse in Western wages.

On several occasions, I have glibly referred to how it now takes two spouses working to equal the wages of a one-income family of 40 years ago. Unfortunately, that is now an understatement. In fact, Western wages have plummeted so low that a two-income family is now (on average) 15% poorer than a one-income family of 40 years ago.



Regular readers will recognize the chart below on U.S. average wages.

Using the year 2000 as the numerical base from which to "zero" all of the numbers, real wages peaked in 1970 at around $20/hour. Today the average worker makes $8.50/hour -- more than 57% less than in 1970. And since the average wage directly determines the standard of living of our society, we can see that the average standard of living in the U.S. has plummeted by over 57% over a span of 40 years.

There are no "tricks" here. Indeed, all of the tricks are used by our governments. The green line shows average wages, discounted by inflation calculated with the same methodology for all 40 years. Obviously that is the only way in which we can compare any data over time: through applying identical parameters to it each year.

Then we have the blue line: showing wage data discounted with our "official" inflation rate. The problem? The methodology used by our governments to calculate inflation in 1975 was different from the method they used in 1985, which was different than the method they used in 1995, which was different than the method they used in 2005.

Two obvious points flow from this observation. First, it is tautological that the only way in which data can be compared meaningfully is to use a consistent methodology. If the government thinks it has improved upon its inflation methodology, then all it had to do was take all of its old data and re-calculate it with their "improved" methodology. Since 1970 there is this invention called "computers" which makes such calculations rather simple.

This brings us to the second point: the refusal of our governments to adopt a consistent methodology in reporting inflation statistics can only imply a deliberate attempt to deceive, since it is 100% logically/statistically invalid to simply string together disconnected series of data -- and present it as if it represents a consistent picture. More specifically, we can see precisely what lie our government was attempting to get us to believe.

http://www.thestreet.com/print/story/11480568.html


Added: Apr-17-2012 Occurred On: Apr-17-2012
By: neutral_person
In:
Politics
Tags: SOL, Culture, need, change, greed, bad,
Location: United States (load item map)
Views: 1567 | Comments: 10 | Votes: 1 | Favorites: 1 | Shared: 66 | Updates: 0 | Times used in channels: 2
You need to be registered in order to add comments! Register HERE
Sort by: Newest first | Oldest first | Highest score first
Liveleak opposes racial slurs - if you do spot comments that fall into this category, please report them for us to review.
  • This recession really wacked me over the head. In 2009 I was making $20.50
    an hour at my manufacturing job when it closed. I immediately went to school
    and got an AA in computer science and graduated in Dec. 2011. After 3+ months of job searching I have my second interview tomorrow via a temp service. It looks like I have the job....I hope. I will start at $9.00 an hour. I started my manufacturing job at $12.50 an hour back in 1991. Ouch.
    I feel sorry for you younger folks and what America has b More..

    Posted Apr-17-2012 By 

    (3) | Report

    • @niltomega - Supply and demand. Too many folks wanting to be computer experts. It doesn't help when the schools that offer training lie about what you can expect to make.

      Posted Apr-17-2012 By 

      (0) | Report

    • @Eluf-ant
      Yep. They lie alright. Luckily my education was paid for but there are poor saps signing up for ITT tech every day who end up on the hook for $50,0000 for a 2 year degree.
      Absurd.

      Posted Apr-17-2012 By 

      (0) | Report

  • The government is killing middle class. It's either bread-line or high rolling. Divide and conquer. A government doesn't get away with tyranny when the people are free traders earning healthy money. This gives them independence and you can't have authority over that.

    The real joke is that the left blame this on capitalism when it is exactly the opposite. There is no capitalism when small business owners go bust because of regualtions. Just like regulations that prevent farmers from sellin More..

    Posted Apr-17-2012 By 

    (2) | Report

  • Today employers expect you to work harder, longer and for less money. Now days the average worker can not afford the products and services they produce.

    Posted Apr-17-2012 By 

    (2) | Report

  • preach! voted

    Posted Apr-17-2012 By 

    (1) | Report

  • First, there is a difference between standard of living and wages. To conflate the two discredits the whole argument. American standard of living has, on the whole, gone up for just about everyone. We have longer lives, better health care (despite affordability problems), larger homes, better cars, better communications, etc. There's a lot more than just wages that goes into standard of living.

    Second, let's pause to consider for a moment why wages have dropped. There have been three or fo More..

    Posted Apr-17-2012 By 

    (1) | Report

  • Comment of user 'RugOutFromUnderYou' has been deleted by author (after account deletion)!
  • Good article and thanks for the post. I noted the part about how inflation plays into this number and find it scary that the real number could potentially be much higher.

    Corporate executives have spent many decades skimming the wage fund for their bonuses and to buy politicians. Our country is on that slippery slope from which many countries have never returned. If we hope to make real change; it will have to start at the grass roots.

    Posted Apr-17-2012 By 

    (0) | Report