https://wtfhappenedin1971.com/ provides a lot of food for though in the form of graphs.
The first graph compares the growth in productivity with the growth in hourly compensation of production and nonsupervisory workers from 1948 to 2017. Between 1948 and 1972 compensation kept right up with productivity. Then in 1972 compensation stopped growing while productivity kept on rising.
The data was taken from the Economic Policy Institute’s State of Working America Data Library.
More recent data is available from the institute’s data library at https://www.epi.org/data/. It covers the years from 1948 to 2022 and is displayed in the graph below.
The lower (green) line shows the compensation rate in dollars per hour with the area under the line shaded in green. The upper (black) line is productivity. The area between the two lines is shaded red.
This graph shows that compensation actually leveled off in 1972. In fact, compensation was falling until 1996.
The graph raises two questions:
How much money does the red shaded area represent (in US dollars)?
Where did the money go that previously would have gone to production and nonsupervisory workers?
What are your thoughts? Leave a comment below.