Last month the Census Bureau released its latest income and poverty numbers. News outlets across the country reported the supplemental poverty rate dropping from 9.2 percent in 2020 to 7.8 percent in 2021. This was rightly hailed as evidence that the economic stimulus package and the refundable child tax credit could dramatically reduce poverty. Furthermore, recent numbers from the Bureau of Labor Statistics have indicated that workers’ wages have continued to grow in the past few months.
Yet overlooked amid this good news is one of the most damning and revealing federal statistics for workers in decades. Buried at the back of the Income Census Report is data showing the long-term trends in the annual earnings for full-time male and female workers. Expressed in 2021 dollars, the 1973 median wage for women working full-time was $34,626. By 2021 their wages had risen to $51,226, good news indeed for women workers.
For men, however, the story is quite different. In 1973, men’s median wage was $61,140. Forty-nine years later in 2021, their median wage stood at $61,180. In other words, after 49 years on the job, full-time male workers saw a pay raise of $40, or less than a dollar a year.
This statistic goes a long way to explaining the backlash that former President Trump and others have exploited. Too many Americans have been working hard over the last 50 years only to see virtually no increase in their purchasing power. This has occurred during the watch of both Republican and Democratic presidents. As I have written elsewhere, one of the key components of the American Dream is the expectation that individuals achieve economic progress during their lifetimes and that standards of living rise across generations. For the last 50 years, that progress has stalled.
The result has been a growing sense of alienation and anger. The American Dream is premised on the bargain that if you work hard and play by the rules, you should be able to get ahead in your life. For too many, that bargain has withered away, as evidenced by the median wage data. It should not be surprising that millions of Americans would vote for someone voicing their anger and promising to fight for the working man.
When Trump declared his candidacy in 2015, he proclaimed the American Dream dead, reflecting and amplifying the feelings of many Americans. At the heart of those feelings is the statistic of a $40 dollar raise after 49 years on the job.
Many factors help to explain this lack of economic progress for male workers. Beginning in the early 1970s, globalization exerted downward pressure on their wages. Employers used the very real threat of pulling jobs out of the country to undermine employees’ bargaining power and reduce labor costs. Unions have been seriously weakened, beginning most notably with President Reagan’s firing of the striking air traffic controllers in 1981.
The rise of the service economy has left in its wake millions of low-wage jobs. These and other conditions have combined to accentuate the wage stagnation that too many workers have been facing.
In fact, virtually all of the economic gains of the past 50 years have been concentrated in the top 20 percent of the income distribution (and particularly the top 5 and 1 percent). The bottom 80 percent have seen their share of the income pie get smaller and smaller over time. For 2021, the Census Bureau’s measures of inequality increased substantially, another statistic that was virtually ignored by the media last month.
As we enter the elections this November and in 2024, Americans are faced with many challenges, including climate change, the war in Ukraine, high rates of inflation and reproductive rights. Nevertheless, if Democrats are to hold on to mainstream voters in upcoming election cycles, they must return to their roots of make sure the American Dream is not just a dream but a reality for millions of hard-working Americans.
An excellent place to start is by raising the minimum wage to a livable wage and indexing it each year to the cost of living, as we do with Social Security payments.
No one in this affluent country should be working full-time yet find themselves falling further and further behind. A substantial raise for the workers of this country is long overdue.
A $40 increase after 49 years on the job is both unconscionable and un-American. We can and must do better.
Mark R. Rank is the Herbert S. Hadley Professor of Social Welfare at Washington University in St. Louis. He is the author of the forthcoming book “The Poverty Paradox: Understanding Economic Hardship Amid American Prosperity.”