In my first installment of “real earnings, real anger,” I noted that I didn’t yet have the earnings numbers I sought with a control for education level. Allow me to correct that omission (thanks to CBPPs Arloc Sherman and Danilo Trisi for data help).
In this group, I’m looking at white men, ages 25 to 54, who do not have a college degree. That includes high-school dropouts (a small group), high-school graduates and those with some college but no degree. These are their annual earnings, which I purposely chose (over hourly pay, e.g.) to capture the impact of the decline in annual hours worked by these guys, including their long-term trend toward dropping out of the labor force.
Or, if you want to talk economese, the labor demand for this group of men has clearly declined, something you see in both quantities — they’re a dwindling share of the labor force — and, as you see below — in “prices,” or real earnings.
Switching back from the language of labor economics to that of political economy, I see a picture that explains a lot of the anger said to be a driving factor in this election cycle. The 10th percentile goes to zero, meaning that share of these men have had no earnings (at least none they reported on this Census survey) since the early 2000s.
The average for this group is down eight percent since 1975. But as the figure below shows — a bar chart of the total change over these years — there’s considerable variation around that mean. There’s evidence of wage inequality, as well, as the only group with any gains at all includes the highest earners, those at the 90th percentile (this is what economists call “within-group” wage inequality, because we’re looking within an education group as opposed to the more conventional college versus high-school wage comparison). FTR, their three percent real gain amounts to less than 0.1 percent per year.
Meanwhile, low-wage workers in this group got slammed, as their earnings fell by almost half since the mid-1970s, while median earnings are down by about one-fifth. It’s a terrible story of a group of men left behind.
Add to this the recent findings of increased mortality rates among this group, and the only question is “why now?” in terms of the rejection of the establishment politics that have done nothing to offset these trends.
I want to avoid a potential pitfall to this analysis. As noted above, this is but a subgroup — and a numerical minority — of the total population and the workforce. It is also a shrinking sub-group, as men, whites and those without a college degree are all declining in numbers and shares, surely another source of anger. Thus, these dismal charts are only part of the story of what’s going on with earnings in the American workforce (for an up-to-date look at the bigger picture, see Elise Gould’s just-released wage analysis, which ain’t exactly pretty either, but not nearly this bad).
But, that said, these are very clear pictures of the problem, of the nexus between real earning and real anger. What to do about it will be the topic of next week’s posts.