Part 1 Why did the wages stop going up? There are four reasons.

Part 1 Why did the wages stop going up? There are four reasons.

There were a hundred and fifty years of rising standard of living for all people. Workers every decade enjoyed more because their wages rose, and they could buy more. They understood more and more work meant they could buy more stuff, i.e. homes, cars, education, health care, retirement, and recreation.  

In the 1970s, that history of the United States stopped. Real wages stopped rising, they never resumed. The majority of our citizens have not come to terms with this fundamental change in the U.S. history. Workers don’t have the wages to support consumption, so they have to find another way, which we as a nation did. 

Why did the wages stop going up? There are four reasons. 

1. Computers, technical change, allowed businesses to replace workers at an extraordinarily rapid pace. They could do with one or two operators what used to take hundreds of people. Robots also replaced human workers. The opportunity here is to be a repair person for computers and robots. 

2. U.S. businesses of the 1945 to 1975 period had no real competitors because of the loss of production by European and Japanese companies caused by WW II. It was a very successful time for U.S. companies that had the field to themselves. 

The United States was the only manufacturing country in the world that didn’t have a war on its soil; it was able to produce for the rest of the world. By 1970, European countries and Japan rebuilt from the war; their rebuilt factories out-produced the U.S. and could sell their products in this country for lower prices. They built and sold TV sets, automobiles, etc. There begins a massive export of jobs to Europe and Japan. The bargaining strength of working people of the U.S. shrinks. 

Two more phenomena began. 

3. American women who had worked in the unpaid home labor force took part-time or full-time jobs in the paid labor force. There was a rapid change in the position of women in the American economy, particularly starting in the 1960s and ‘70s. 

4. The waves of immigration began to arrive from Central and Latin America, and from other places around the world. Wages went down as these immigrants tended to work for lower wages. 

With the development of the computer, increased competition of production from rebuilt factories in Europe and Japan, and women and immigrants entering the paid labor force meant fewer jobs were available for white men and wages stagnated.  The perfect storm forms.


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Comment by tom sarbeck on November 23, 2016 at 12:06am
The employees of America's auto makers didn't protest.
The auto makers customers did protest; they bought Japanese-made autos.

In 1959, before American auto makers rejected quality control, I bought a German-made Volkswagen 'bug' and experienced both quality and economy. I did not again buy an American auto.
Comment by tom sarbeck on November 22, 2016 at 11:53pm
Joan, in the early 1960s, a man whose name I've fogotten tried to sell quality control to America auto makers. They weren't interested so he went to Japan and sold it to auto makers there.

Do you remember the resulting term "planned obsolescence" that described the policies of American auto makers?



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