Fact check: Are weekly wages in the US ‘lower than 50 years ago’?

In a November 10 quality connected CNN’s State of nan Union, United States Senator for Vermont Bernie Sanders dismissed a mobility from big Dana Bash astir whether Democrats’ mediocre showing successful nan 2024 predetermination came down to messaging complete policy.

“It’s not messaging, Dana,” Sanders said. He said nan system has been anemic for mean Americans for decades.

“It has to beryllium put into an wide discourse where, successful nan past 50 years, if you could judge it, inflation-accounted-for play wages are little coming than they were 50 years ago, a monolithic transportation of wealthiness from nan bottommost 90 percent to nan apical 1 percent,” he said.

However, this is simply a cherry-picked statistic. Most information show that US wages person gained crushed supra nan inflation rate compared pinch 5 decades ago.

The measurement economists astir commonly usage for inflation-adjusted wages, which they telephone “real wages”, is known arsenic “median accustomed play earnings” for full-time costs and net workers, property 16 and older. If nan costs successful this measurement is higher now than 50 years ago, past wages person kept gait pinch prices, aliases exceeded them, complete that play of time. If nan costs successful this measurement is little than 50 years ago, wages person lagged nan emergence successful inflation.

So what do these “real wage” numbers show? They show wages outpacing ostentation by a cumulative 10.7 percent complete 50 years, opening pinch their level successful nan first 4th of 1979, which is nan earliest information available. (That’s almost 46 years ago.)

Inflation-adjusted wages person risen complete nan past 50 years, but not dramatically

It is not a melodramatic increase; it useful retired to wages expanding astir two-tenths of a percent faster than ostentation per year. Still, this information shows that wages person risen beyond inflation.

Economists counsel ignoring nan COVID-19-era spikes successful costs data; those don’t travel from costs gains but from nan arena of lower-wage workers successful industries specified arsenic hospitality being laid disconnected during nan pandemic. That near higher-wage workers, including those capable to activity from home, successful nan workforce, boosting nan mean aliases median wage.

We besides looked astatine different information group maintained by nan Economic Policy Institute, a wide deliberation tank. The group looks astatine inflation-adjusted wages done nan lens of incomes, specified arsenic nan lowest 10 percent of earners, nan second-lowest 10 percent, nan apical 10 percent and nan apical 5 percent.

The Economic Policy Institute information show that each portion of nan income spectrum earned wages successful 2023 supra their 1973 level.

Over nan past 50 years, wages person risen beyond ostentation for each portion of nan income spectrum but faster for higher-earning Americans

Wages successful nan apical tiers of nan income spectrum person risen faster than wages for nan lowest tiers during that period. But moreover nan lowest-paid workers’ wages hit ostentation complete nan past 50 years.

When we asked Sanders’s agency for his evidence, a spokesperson pointed to a different group of costs data: mean play net of private-sector accumulation and nonsupervisory employees. This information focuses connected a much blue-collar conception of nan workforce.

Sanders points to nonsupervisory wages being little today, but relies connected a blip 52 years ago

Sanders’s agency told PolitiFact nan legislator is comparing now pinch February 1973, almost 52 years ago. Normally we would not quibble pinch a two-year difference, but successful this case, choosing that peculiar day has a large effect connected nan comparison.

In 1971 and 1972, wages for private-sector accumulation and nonsupervisory labor roseate by 6 percent, an summation ne'er matched earlier aliases since. Sanders’s calculation uses nan costs peak, successful February 1973.

Dean Baker, co-founder of nan wide Center for Economic and Policy Research, said this different emergence successful wages was attributable to then-President Richard Nixon’s argumentation of value controls, which progressive a 90-day frost successful prices, followed by value increases that required support by a “Pay Board” and a “Price Commission”.

But starting successful early 1973, erstwhile Nixon ended value controls, this aforesaid costs metric fell moreover much quickly than it had risen, crashing by almost 9 percent complete 2 years.

If you comparison today’s wages pinch nan February 1973 peak, arsenic Sanders did, wages are 3.8 percent little for nan subset of earners that includes private-sector accumulation and nonsupervisory employees.

But if you look backmost precisely 50 years earlier nan astir caller information for September 2024, today’s wages are 2.8 percent higher than successful September 1974.

“This really does consciousness for illustration cherry-picking nan data,” said Douglas Holtz-Eakin, president of nan centre-right American Action Forum. “No existent consequence should beryllium that delicate to a fewer information points.”

Again, 2.8 percent is not a large increase, particularly complete 50 years, but it is an summation beyond nan complaint of inflation, and it is not a decline, arsenic Sanders said.

Baker added: “Workers decidedly person not gotten their stock successful nan past half century, but it is ridiculous to opportunity that they person made nary gains.”

He offered different logic for scepticism astir Sanders’s statistics.

“The mean activity week is almost 10 percent shorter now than 50 years ago,” Baker said. “Workers person chosen to return portion of their gains successful much leisure .”

Our ruling

Sanders said inflation-adjusted play wages “are little coming than they were 50 years ago”.

Two measures that economists astir commonly usage for inflation-adjusted wages show higher wages now compared pinch 5 decades ago.

Sanders cited a different information group for nonsupervisory workers, showing wages little now than successful February 1973. However, that period represented an different precocious constituent successful wages because of Nixon-era value controls. When value controls were lifted, wages plummeted.

The 50-year comparison, utilizing September 1974 arsenic nan starting point, shows wages up by 2.8 percent beyond inflation.

We complaint nan connection False.