Many years ago, in the mid 1970’s, I was living during a time of high inflation and energy price shocks. At that time, I thought that the energy shocks and inflation were causing real wage income to decrease, by way of inflation, and that the distribution of wealth was shifting in such a way that a person’s control over their income picked the winners and losers.
I did some research on the topic for my creative component at Iowa State in 1985 – for my master’s degree – but the subject has lain fallow in my mind since then, with my having made occasional forays into the data. This the the beginning of looking at the problem again. Below are CPI-All Urban Consumers (Current Series), https://data.bls.gov/timeseries/CUUR0000SA0 , and three sets of data from https://www.bls.gov/webapps/legacy/cesbtab8.htm – bullet list 8, giving average hourly wages for all non-agricultural private workers, goods producers, and service providers. All the datasets contain monthly figures from January 1964 to October 2017 and are on the Bureau of Labor Statistics website.
From the plots, real income was increasing strongly up until around the 1973 Oil Embargo, dropped, rose, fell until the mid to late 1990’s and have been on an upward trend since then, except for the last few years. Also, producers of goods make more money than service providers, on average.
More on this next month.