Real Hourly Compensation Has Increased
We hear a lot about stagnant or declining real incomes, but the graph above shows the relentless and continual increase in real hourly compensation since 1947, data are from the BLS, see the most recent release here. One issue is that compensation includes both wages AND benefits, and we should really look at TOTAL COMPENSATION over time, and not just monetary wages.
1. The data in the graph above are quarterly, and measure real (inflation-adjusted) hourly compensation (wages AND benefits). Click on graph to enlarge.
2. Using the percent change from the same quarter a year ago, real wages increased by 3.3% in the third quarter this year, 3.7% in the second quarter this year, and 2.6% in the first quarter of this year. In fact, we have had 45 consecutive quarterly increases in real compensation, and you have to go all the way back to the second quarter in 1995 for the last quarterly decrease in real hourly compensation.
3. The last time in U.S. history when there was a consectutive increase that long in real hourly compensation was from 1961-1973, when there were 51 staight quarters of increases in realy hourly compensation.
4. Over the last 10 years, there was a 25% increase in real hourly compensation for the first time for a 25% increase in real compensation during a 10-year period since the 1963-1973 period.
Don't buy into all of the "gloom and doom" scenarios about declining incomes - real hourly compensation is at an all-time high, and has increased faster over the last ten years than in a generation.