By Heidi Shierholz
Labor Market Economist
Economic Policy Institute, Washington, DC
email@example.com, (202) 775-8810
In the late 1970s, after a long period of holding fairly steady, the gap in wages between men and women began improving. In 1979, the median hourly wage for women was 62.7 percent of the median hourly wage for men; by 2012, it was 82.8 percent. However, a big chunk of that improvement – more than a quarter of it — happened because of men’s wage losses, rather than women’s wage gains.
With the exception of the period of labor market strength in the late 1990s, the median male wage, after adjusting for inflation, has decreased over essentially the entire period since the late 1970s. Between 1979 and 1996, it dropped 11.5 percent, from $19.53 per hour to $17.27 per hour. With the strong labor market of the late 1990s, the median male wage partially rebounded to $18.93 by 2002. It then began declining again; at $18.03 per hour in 2012, the real wage of the median male was 4.7 percent below where it had been a decade earlier.
This cannot be blamed on economic stagnation. Between 1979 and 2012, productivity – the average amount of goods and services produced in an hour by workers in the U.S. economy — grew by 69.5 percent, but that did not translate into higher wages for most men. Over this period, the real wage of the median male dropped 7.6 percent. This is a new and troubling disconnect: In the decades prior to the 1970s, as productivity increased, the wages of the median worker increased right along with it.
Furthermore, looking at the median wage understates the losses many men have experienced since the 1970s. For men with a high school degree, real wages have fallen by more than 14 percent. It is not the case, however, that men’s wages have fared poorly since the 1970s because men do not have the right education or skills. In the last 10 years, even workers with a college degree have failed to see any real wage growth.
Nor are men’s losses are due to women’s gains. The forces that were holding back male wage growth were also acting on women’s wages, but the gains made by women over this period in educational attainment, labor force attachment, and occupational upgrading, along with greater legal protections against discriminatory pay, initially compensated for adverse forces. In the last decade, however, women’s wages have also dropped.
Unlike the postwar period, when economic policy supported the expansion of good jobs, for the last 35 years, the focus has been on policies that were advertised as making everyone better off as consumers through lower prices: deregulation of industries, the Federal Reserve Board’s prioritizing low inflation over full employment, weakening of labor standards including the minimum wage, a “stronger” dollar — which costs manufacturing jobs by making our goods relatively more expensive around the world and imports relatively cheaper to US consumers — and the move toward fewer and weaker unions. The decline in unionization alone explains about a third of the rise in male wage inequality (and about a fifth of the increase in female wage inequality) over this period.
Together, these policies have eroded the individual and collective bargaining power of most workers, depleting access to good jobs. In other words, these policies have served to make the already-affluent better off at the expense of the rest.