The declining fortunes of (most) American workers

Laura Harvey and James Rockey

No 2020-04, University of East Anglia School of Economics Working Paper Series from School of Economics, University of East Anglia, Norwich, UK.

Abstract: While real US GDP per capita has increased around 80% since 1980, median incomes have remained roughly constant. However, as this paper documents, this stagnation masks an important decline. Male median real incomes have been lower than that of their forebears, at every age, for the last 30 years. We show that this is true across the life cycle and across the wage distribution. Moreover, younger generations have also had to wait longer to reach peak earnings. Further analysis shows that this decline is particularly concentrated on high school graduates. The same pattern is found for female high school graduates yet, African American and Hispanic American women are an important exception. Variance decompositions suggest that these intergenerational differences are quantitatively important. While reductions in hours worked cannot explain the decline, substantial decreases in the labour share are consistent with decreasing incomes in the face of productivity growth. Calculations suggest that hedonic improvements in the quality of goods and services would have to have been equivalent to 30% of younger cohorts’ lifetime consumption for their consumption levels to match those of their predecessors

Keywords: Wages; Intergenerational Differences; Labour Share; Stagnation; Jobs (search for similar items in EconPapers)
JEL-codes: D31 D33 E24 J24 J31 (search for similar items in EconPapers)
Date: 2020-08-10
New Economics Papers: this item is included in nep-his, nep-lma and nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ueaeco.github.io/working-papers/papers/ueaeco/UEA-ECO-20-04.pdf main text (application/pdf)

Related works:
Working Paper: The declining fortunes of (most) American workers (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaeco:2020-04

Ordering information: This working paper can be ordered from
Reception, School of Economics, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, UK

Access Statistics for this paper

More papers in University of East Anglia School of Economics Working Paper Series from School of Economics, University of East Anglia, Norwich, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Cara Liggins ().