Re: Robert Frank and the Real Median Wage

[AdmrlLocke]

I have mentioned two factors in response to your earlier emails and got no 
response, so perhaps my message didn't go through.   One factor regards the 
question of what they're measuring--money wage versus total employee 
compensation. 
  The non-wage component of total employee compensation has risen 
substantially over the past decade or two, primarily in the form of increasing 
value of 
medical insurance.   The other factor regards the deflator they're using--CPI-U 
versus CPI-X or perhaps even GDP deflator.   

Of course we might wonder why real median income per capita has risen even 
using the CPI-U as a deflator but real median wages have not.   I'd start with 
total employee compensation to answer that question.

In a message dated 4/17/07 11:54:34 PM, [EMAIL PROTECTED] writes:


 In that NY Times article, Frank said that the median hourly wage adjusted 
 for inflation was lower in 2005 than it was in 1980. I looked for data on the 
 median hourly wage over time at the BLS and could not find a series going 
 back to 1980. One person who works there told me they did keep track of it.
   
  I did find data on the median real income over time at the Census Bureau 
 website. Here is a link to the data I used in my analysis below
   
  http://www.census.gov/hhes/www/income/histinc/p05ar.html
   
  From 1974 to 1982, the real median income for males fell 7.7%. From 1982 
 (maybe the first year Reagonomics may have had an effect) to 1990, they went 
 up 
 8.8%. For females, in the earlier period, it increased 6.8%. In the latter 
 period, it increased 27.9%.
   
  Frank seemed to be saying that trickle down or Reagonomics did not work. 
 These numbers seem to show that it worked well or at least did not do poorly.
   
  From BLS data, it appears that the mean real hourly wage from 1980-2005 did 
 not change much. This Census Bureau site shows the real median income for 
 both males and females being higher in the latter year. Anyone know why the 
 discrpeancy? Has the proportion of income earners who are paid by the hour 
 changed? The increase for both men and women means things have gotten 
 better. Anyone know if there is anything wrong with the census data?
   
   
 
 
 Cyril Morong, Ph. D.
 Associate Professor of Economics
 San Antonio College
 




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Incomes over time

[Cyril Morong]

I looked at the Census Bureau's Income, Poverty, and Health Insurance Coverage 
in the United States: 2005 report at
   
  http://www.census.gov/prod/2006pubs/p60-231.pdf
   
  That report link I sent you on page 9 says
   
  The income and poverty estimates shown in this report are based solely on 
money income before taxes and do not include the value of noncash benefits such 
as food stamps,
Medicare, Medicaid, public housing, and employer-provided fringe benefits.
   
  See page 45 for male and female median income. Male is just slightly lower in 
2005 than 1980 but female is much higher. To be fair to trickle down policies 
I don't think we should make the comparison until 1982 when the 1981 tax cut 
started having an effect. Male median income is a little higher in 2005 than in 
1982 and it was a little higher in 1989, the year Reagan left office but a 
little lower in 1990. Overall household income is much higher in 2005 than in 
1980. See graph on page 11

   


Cyril Morong, Ph. D.
Associate Professor of Economics
San Antonio College