In a November 10 look on CNN’s State of the Union, United States Senator for Vermont Bernie Sanders dismissed a query from host Dana Bash about whether or not Democrats’ poor exhibiting within the 2024 election got here all the way down to messaging over coverage.
“It’s not messaging, Dana,” Sanders mentioned. He mentioned the financial system has been weak for common People for many years.
“It needs to be put into an general context the place, within the final 50 years, if you happen to may consider it, inflation-accounted-for weekly wages are decrease right this moment than they had been 50 years in the past, a large switch of wealth from the underside 90 p.c to the highest 1 p.c,” he mentioned.
Nonetheless, it is a cherry-picked statistic. Most knowledge present that US wages have gained floor above the inflation price in contrast with 5 a long time in the past.
The measure economists mostly use for inflation-adjusted wages, which they name “actual wages”, is named “median typical weekly earnings” for full-time wage and wage staff, age 16 and older. If the wage on this measure is larger now than 50 years in the past, then wages have stored tempo with costs, or exceeded them, over that time period. If the wage on this measure is decrease than 50 years in the past, wages have lagged the rise in inflation.
So what do these “actual wage” numbers present? They present wages outpacing inflation by a cumulative 10.7 p.c over 50 years, starting with their stage within the first quarter of 1979, which is the earliest knowledge accessible. (That’s nearly 46 years in the past.)
Inflation-adjusted wages have risen over the previous 50 years, however not dramatically
It’s not a dramatic improve; it really works out to wages rising roughly two-tenths of a p.c sooner than inflation per 12 months. Nonetheless, this knowledge exhibits that wages have risen past inflation.
Economists advise ignoring the COVID-19-era spikes in wage knowledge; these don’t come from wage features however from the phenomenon of lower-wage staff in industries resembling hospitality being laid off through the pandemic. That left higher-wage staff, together with these in a position to do business from home, within the workforce, boosting the typical or median wage.
We additionally checked out one other knowledge set maintained by the Financial Coverage Institute, a liberal assume tank. The group seems to be at inflation-adjusted wages via the lens of incomes, such because the lowest 10 p.c of earners, the second-lowest 10 p.c, the highest 10 p.c and the highest 5 p.c.
The Financial Coverage Institute knowledge present that each slice of the revenue spectrum earned wages in 2023 above their 1973 stage.
Over the previous 50 years, wages have risen past inflation for each a part of the revenue spectrum however sooner for higher-earning People
Wages within the prime tiers of the revenue spectrum have risen sooner than wages for the bottom tiers throughout that interval. However even the lowest-paid staff’ wages beat inflation over the previous 50 years.
Once we requested Sanders’s workplace for his proof, a spokesperson pointed to a distinct set of wage knowledge: common weekly earnings of private-sector manufacturing and nonsupervisory workers. This knowledge focuses on a extra blue-collar phase of the workforce.
Sanders factors to nonsupervisory wages being decrease right this moment, however depends on a blip 52 years in the past
Sanders’s workplace advised PolitiFact the senator is evaluating now with February 1973, nearly 52 years in the past. Usually we might not quibble with a two-year distinction, however on this case, selecting that individual date has a huge impact on the comparability.
In 1971 and 1972, wages for private-sector manufacturing and nonsupervisory workers rose by 6 p.c, a rise by no means matched earlier than or since. Sanders’s calculation makes use of the wage peak, in February 1973.
Dean Baker, co-founder of the liberal Heart for Financial and Coverage Analysis, mentioned this uncommon rise in wages was attributable to then-President Richard Nixon’s coverage of worth controls, which concerned a 90-day freeze in costs, adopted by worth will increase that required approval by a “Pay Board” and a “Worth Fee”.
However beginning in early 1973, when Nixon ended worth controls, this identical wage metric fell much more quickly than it had risen, crashing by nearly 9 p.c over two years.
For those who evaluate right this moment’s wages with the February 1973 peak, as Sanders did, wages are 3.8 p.c decrease for the subset of earners that features private-sector manufacturing and nonsupervisory workers.
However if you happen to look again precisely 50 years earlier than the newest knowledge for September 2024, right this moment’s wages are 2.8 p.c larger than in September 1974.
“This actually does really feel like cherry-picking the info,” mentioned Douglas Holtz-Eakin, president of the centre-right American Motion Discussion board. “No actual consequence ought to be that delicate to a couple knowledge factors.”
Once more, 2.8 p.c isn’t an enormous improve, particularly over 50 years, however it is a rise past the speed of inflation, and it isn’t a decline, as Sanders mentioned.
Baker added: “Staff positively haven’t gotten their share within the final half century, however it’s ridiculous to say that they’ve made no features.”
He provided another excuse for scepticism about Sanders’s statistics.
“The typical work week is sort of 10 p.c shorter now than 50 years in the past,” Baker mentioned. “Staff have chosen to participate of their features in additional leisure .”
Our ruling
Sanders mentioned inflation-adjusted weekly wages “are decrease right this moment than they had been 50 years in the past”.
Two measures that economists mostly use for inflation-adjusted wages present larger wages now in contrast with 5 a long time in the past.
Sanders cited a distinct knowledge set for nonsupervisory staff, exhibiting wages decrease now than in February 1973. Nonetheless, that month represented an uncommon excessive level in wages due to Nixon-era worth controls. When worth controls had been lifted, wages plummeted.
The 50-year comparability, utilizing September 1974 as the start line, exhibits wages up by 2.8 p.c past inflation.
We price the assertion False.