Where has all the money gone for the past 50+ years?

Not to the workers.

For three decades after World War II, the average hourly compensation of American workers rose in lockstep with the nation’s productivity gains. In other words, as workers produced more value, they got more pay.

It was a virtuous cycle, from which our family and tens of millions of others benefited: The economy grew, and the middle class expanded. Its purchasing power rose, causing the economy to grow faster. This fueled new investments and innovations that further enriched and enlarged the middle class.

But then, beginning in the late 1970s, the virtuous cycle came to a halt.

While productivity gains continued much as before and the economy continued to grow, wages began to flatten. Starting in the early 1980s, the median household’s income stopped growing altogether, when adjusted for inflation.

Jumping to the end.

The underlying problem is that average working Americans have steadily lost the bargaining power to receive as large a portion of the economy’s gains as they received in the first three decades after World War II. As a result, instead of the middle class growing, it has shrunk.


Not coincidentally, offshoring began in the '70s. As time progressed, American workers were competing in a global labor pool. A call center could be located in Minnesota or Manila. Manufacturing could be done in Mexico or China. Of course, wages have slowly risen in such places but that pressure isn’t quickly going away.



Working-class folks voted for this. I still remember Reagan busting air traffic controller union, but still winning Michigan. Almost all of the UAW members that I knew at the time ( including some family members ) voted for him. Think about that, it still makes my head hurt lol, union members voted enmasse for a guy who broke a union. Folks can blame off shoring and NAFTA all they want, but the American middle class voted in people who clearly showed that they were pro elite, not pro middle class, so as a group we got what we thought we wanted. And a lot of us still believe the fairy tales that some Pol’s spew, when the Pol’s actions clearly show a different story.


And it is impossible for USian labor to work for Mexican wages. You can’t live in the US on the $30/day that a Mexican autoworker makes.



It is discussed in the linked article.


Re: workers have lost bargaining power

That seems to be historic news. But now we have a labor shortage. And declining birth rates indicate it will get worse.

Now you must pay better to get people to come to work.

And the other side is immigration. Labor has good reason to demand better control at the border.

…And Reagan went on to fire all 12,000 controllers who walked off the job after their demands for shorter workweeks and higher pay were rejected. Since Reagan there have been a constant shortage of controllers.

In 2008, controllers had worked for two years without a contract. Because of the Reagan fiasco, controllers unable to strike simply left the job. Further, 9,000 of the replacement (hired essentially overnight) workers from the Reagan firing were up for early retirement and walked away. Obama was forced to negotiate with the Union and they got a contract with better pay and conditions the following year.
Currently, the controllers are still short according to Secretary Pete Buttigieg. There are 3,000 unfilled controller positions in at the workforce as of today. Last year there were 23 near misses at airports, however according to a NYTimes article last August, there are actually near misses everyday.

A big part of that according to the FAA is air traffic controllers handling multiple screens at once because of daily shortages of staff, and trying to handle too much after working a 60 hour week. An air traffic controller can work a 10hr shift be off for 9hrs and back to work another 10hrs shift.
Buttigieg announced that 1,500 air traffic controllers had been hired shortly after the Labor Day congestion that cancelled flights. His recruiting campaign required more pay raises and concessions. Reagan busted the Union, but ultimately, the Union has busted back, quadrupling wages and bring average pay up to more than twice the national average of pay with tremendous retirement benefits.



“Reagan busted the Union, but ultimately, the Union has busted back, quadrupling wages and bring average pay up to more than twice the national average of pay with tremendous retirement benefits.”

Wow, I didn’t know that, glad to hear that the ATC’s bounced back with a vengeance, the near misses sure don’t want to make me get in a plane again. But middle-class voters are still susceptible to the fairy tales offered up by the pol’s, especially the “patriot” pol’s. Very interested to see if any lessons have been learned in the 2024 elections.

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And blue collar workers are susceptible to the complaints about “coddled” union workers that make “above average” pay and benefits. Meanwhile, the media talks about unions as if they were gangsters, describing union Presidents as “bosses”.

A former coworker of mine, whose husband was a union carpenter, had an interesting bumper sticker on her car “fight for your own benefits, instead of taking other’s away”.



pre-strike average salary was $34,000 a year when Reagan sought to control the controllers. Last year Buttigieg increased salaries to boost the hiring campaign. The average salary now stands at $138.000 a year.


Adjusted for inflation:

$34K ==> $115K

138/115 = 1.20

Average compound growth rate of 0.4% per year.



[quote=“DrBob2, post:11, topic:100610”]
Adjusted for inflation:

$34K ==> $115K

138/115 = 1.20

Median household income in 1985 was $23,260
Median household income in 2023 was $57,406
The ATC’s average income pre-strike was $34,000
The Air Traffic Controllers earned on average 47% more than average Americans pre-strike
Today the average salary now stands at $138.000 a year for Air Traffic Controllers.
The Air Traffic Controllers earn on average 1.4x more than average Americans today.


Absolutely! Nobody ever lost money betting on the racism, ignorance and innumeracy of the American people

President Lyndon B. Johnson once said, “If you can convince the lowest white man he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.”

True then, true today.



I live in MN (metro area). According to a 2023 report, an income of $100+k was needed to live here “comfortably”. More importantly, this area is pretty much near the 100% cost level for the US (i.e. not much above OR below the national average). So $100+k vs $138K compares reasonably to the historic pre-firing rate of pay for an ATC vs average worker pay.

Don’t confuse median household with median salary/wage in the Minn/St.Paul.
The annual mean wage/salary all occupations for the Minneapolis-St. Paul-Bloomington, MN-WI area is $67,060 for 2022 according to data collected by BLS.


by the way, minimum wage in Wisconsin/Minnesota $7.25; I believe that effective January 1, 2024 the State of Minnesota increases the min wage.


The chart here

shows the trend.

Productivity has been growing faster than real wages over the last 60 years (the blue line rises faster than the red line).

The chart also shows corporate profits as a percent of GDP (green line). They are as high as ever.


As of January 1, 2023, Minnesota’s minimum wage is $10.59 per hour for large employers. For other state minimum wages, including small-employer, youth, and training wages, the minimum wage is $8.63 per hour.

On January 1, 2024, Minnesota’s minimum wage will increase to $10.85 per hour for large employers and $8.85 per hour for other state minimum wages.

The city of Minneapolis will also increase its minimum wage to $15.57 in 2024.

Minnesota’s minimum wage rates are adjusted annually for inflation.

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You’re correct, I was wrong about min. wage for the Minneapolis and St. Paul area. It makes sense if the cost of living there high.
The point is that collective bargaining allows employees to stay ahead of inflation.
According to the CPI index: $34k buying power for the average ATCer in 1985: $34,000 in 1985 is equivalent in purchasing power to about $96,281.35 in 2023. The Air traffic controllers’ Union has kept its ATCs $42k / year ahead of inflation, while average income for all Americas lags behind.
Median income in 1985 for all Americans was 23,260. $23,000 in 1985 is equivalent in purchasing power to about $65,131.50 in 2023. Meanwhile, Median income in 2023 was $57,406

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Yep. Check out the S&P 500 vs. median income since 1981. I wonder what happened in 1981?

Minimizing the “Skim” – the Key to Retiring Early (retireearlyhomepage.com)



This is criminal

After much negotiation, General Motors has given workers at its largest factory in Mexico a raise that comes out to 25 cents an hour, on average. This bumps up the average factory worker’s pay from $3 an hour to $3.25 for many at the GM Silao plant, where the Chevy Silverado and GMC Sierra are made.May 16, 2022

What Trump set up. I get it is by 2030.


$16 per hour wages for auto workers

The disparity in wages between Mexico and the U.S., where where auto workers on average make about $20 per hour, likely won’t change anytime soon. But if Mexican workers were to earn more than they do now, U.S. companies would have less incentive to move factories across the border.

The USMCA trade deal includes a provision that requires automakers to produce 40 percent of a car’s parts by 2030 in factories that pay an average of $16 per hour, or risk not qualifying for free-trade status. It’s a move the Trump administration says will bring more jobs back to the U.S.

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