WAGES AND ECONOMIC CHANGES 1

Wages and Economic Changes

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Introduction

Most U.S. citizens normally share their economic growth from the wages they receive,

from the labor rather than just investments incomes. Many of the workers receive a small

proportional pay significantly, especially in the last five decades. From the 1970s, the adjusted

wages which a worker receives have only risen by 0.2% per year. Although the economy has

been growing, the way workers have benefited from the growth has been stalled. So that to have

a comprehension on how the stagnation of wages has occurred, it not only a matter of an

academic question but also important to have a focus on the public policies that have been put

there in place there by the government to safeguard the workers (Schmitt, Gould, & Bivens,

2018). Notably, on the wages, it is very critical to have a change of policies so that more

Americans can have a share of the economic growth. For the workers' wages to have a growth

the productivity equally must also rise and therefore the production per hour should be more with

the help of the new technology. On the same workers have to have a constant share of the

productivity gains rather than just having a decline of their wages. Since the late 1970s, there

have been major developments regarding wages in the U.S. The stagnation of the real wages on

the various groups of the workers and the increase of the wage inequality. (Luce, 2017). This

paper seeks to find out how wages influenced and the structural economic changes within the

past fifty years of in the U.S. The paper also aims to find out other structural economic changes

which affected wages. The paper will also compare the median wages of U.S. workers within the

1970s and compare with that of the current wages.

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Economic Structural effects of Wages

At the beginning of the 1970s, it was a remarkable period for the American workers, as

the wages had significantly risen compared to the previous years. Although there were

incomplete statistics at the beginning of the 20 century, it was very clear for the American nation

that the workforce there was much better than its beginning. Some of the statistics used to

analyze America's working conditions came on improving time overtime over the century. By

the year 1975, the workforce had already registered more than 24 million workers. The number

of employment improved, and the compensation, workplace, and the nature of the work also

significantly improved. The labor force's composition had already shifted from the factories that

had already been owned by the primary production occupations like the farmers and the fosters

and dominated by the professional services worker, due to the increase of the labor force and the

wages' wages. There was a significant increase in industrialization across America. The service

industries increased by 20%, and the manufacturing industries increased by 15 % construction

and the mining industry also improved proportionately by the same amount (Sacerdote, 2017). 

As a result of increased wages, there were improvements in technology with various

workplace changes since homemakers were able to shift time from home production to paid jobs.

At the same time, there many industries which expanded. Before 1970 the electricity distribution

was in less than 10% of the homes in the American nation home at the turn of the century but it

was almost universal in the last 50 years. New machines were introduced in machines that were

introduced in the new homes 50 years ago, including the refrigerators, the dryer, vacuumed

cleaners, and eclectic hairdryer. In the same way, there were technology improvements that

worked in the economy. There were medical advances that have extended individuals' life span,

which has contributed to reducing the health disparities. Therefore, the wages they were able to
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get in their workplaces improved their health. Within the same period of the 50s ago, there was a

host of new drugs and family contraceptives family planning methods that impacted the workers.

As a result of the provision of wages, there has been improved transportation, the primary use of

the automobile, massive shifts in workplaces' location (Fishback,& Seltzer,2021). The factories

were also constructed in most parts of America, especially in the rural areas of the cheap land,

and built on single levels.

Median Wages

In the last four decades, the united states have been experiencing a slow movement of the

wage. Since the end of Second World War II in the late 1970s, the United States had a rapid

wage growth rate widely shared across the nations. However, since 1979, the average wage

growth rate had decelerated sharply, with the biggest decline at the bottom and the middle. The

same and unequal pattern of growth has continued in ongoing recovery from great recessions.

The salient features of the trends in the wages for almost four decades ago are the slowness in the

real growth rates for most of the majority of the workers and increasingly inequality amount

payable for every worker that is determined by multiple dimensions such as the race,

geographical state, as well as class dimensions. The trends have played against a backdrop,

especially with educational attainment and the work experience for the U.S. workforce,

especially for the female gender and the U.S. workforce experience, especially in women. In any

case, in human capital, the workforce has to raise wages and narrow inequalities.
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Gender and the Wages

In the last four decades, most of the women in the United States did not work outside

their homes, and most of the women who worked outside their homes were mostly unmarried.

Within that error, only a small significant figure of almost 20% of all the women was workers

where most of them took the role of being housewives. When women began to enter into male-

dominated occupations between the 1970s and 2000, there were tremendous economic changes

in the United States. This was because both the men and women had prevalence choices when it

came to occupations. The men had their own choice of work and the female gender due to family

duties and job skills, the training demands, and the family choices. Although both the men and

women were put in the same career choices, the men appeared to be more skillful than the

women. According to the survey 50 years back, most of the women did have sufficient work

skills, and therefore they spend less time in the labor market. Another factor that brought

variance between men and women within the job market is educational attainment. Educational

attainment between men and women also affected their compensation rates, in early 1970, most

of the women were uneducated, and therefore most of them had low wages payout, and others

never went to work. Very few of them had a degree to attain employment. However, by 2009,

many women had already pre-dominated all the degree levels, and according to the 2021

projections, there is an indication that more than 65% of education graduation ceremonies are of

women.
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In between 1970 and 2021, women's participation in the economy has continued giving the

reason for the rise of work, mostly among married women. By 2003 more than 50% of single

women and 30% of married women had started participating in the labor force, where several

factors had contributed to this rise. First, there was an improvement in girls' education; there

was improved technology, which contributed to an increase in demand for clerical workers

where women currently occupy them. Similarly, since the jobs were tidier and cleaner, the level

of the stigma that was initially attached to the married women also diminished, although there

were still marriage bars that made the married women out of the labor force.

Education and Aging

Higher education levels have been said to have a greater level on the wages, relatively to the

base case of the year. Education is regarded as very crucial for development. Education was

regarded as an indicator of labor characteristics concerning employment, and therefore, in the

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early 1970s, the more educated people in the United States had a higher advantage of increased

salary and wage. During the period, the economic system had a high demand for qualified,

skilled workers, which was distinguishable between the skilled workers and no skilled, and

therefore, there was a big gap in wage income between the educated and non-educated skilled

employees. There is not much difference between the early 1970s in America and the current

demand for education levels. Still, there is a high demand for quality and skilled labor in the

current years, and therefore those educated and with skilled labor forced are of the great

advantage of higher wages compared to the semi-skilled or non-skilled labor. The current

economy demonstrates that education leads to higher wages and salary (Binder & Bound, 2019).

Currently, education has a vital role in the current economy and health, and generally in the

overall health. As compared to the 1970s, Americans have made tremendous steps of improving

the education systems for higher salary wages and salary for a better improvement of living

standards.
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From the above data, it is clear that the 1970s to 1980s was very bad in the last 45 years in the

wage incomes. For the non-college people aging 25-29, there was a reduction of 40% in that

decade in the wage income within the areas studied. The ones with four or more years in college

aging 25-29 had a major reduction of 20% from the map. Only those with more than four or

more years in college were not affected by the declines of the real income in income from 1970

in the United States.

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Race

There is still a gap between the whites' average incomes and the blacks in the United States,

which all started in the last 50 years back. Generally, the black families who the women-led had

risen by one-fifth, and the black men who had the jobs during the same period had significantly

dropped. According to the various studies, black families were paid low wages compared to

white people who did the same type of work the black people did. Within the same period, black

women earned sixty cents for every dollar earned by a white woman between 1970 to 1980.

However, the same has deteriorated for the black women as they earned less than that. The

median wages for the black men to the relative of white women was close to parity in the year

1975 while the earning of the black women relative to the white women fell.
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Wage difference and race

Structural Economic Factors That Affected Wages

Inflation

The high rate of inflation affected the rate of debt and the agent redistribution. It also

impoverished a large area of the population by eroding their real wages. In the early seventies,

there was wage a wage push inflation which resulted in the overall rise in the prices of the goods

to increase the wages of the workers. Therefore many of the industries and the factories

increased the prices of the goods they were selling. In the 1970s, there was much inflation such

that the stock market was in a mess. It had already lost over 50% of the 20 months, and in the

limited period, only a few people had a concern with the stocks. The economic growth was very

weak, and employment was very rare in America during this period. In the great inflation level of
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wages, the increase was significantly less than 5% as most business people opted to close down

their business. It was very clear that the monetary policies that led to budget deficits and also

influenced by the political leaders. Inflation is a monetary phenomenon that influenced

employees as they had a drop in their wages (Gellman, & Rung, 2018). The bad economics was

later followed by an economic boom, and where Americans were forced by temporary

unemployment in the year1972.

Demand and supply

The wage rate in the 1970s was also determined by the intersection between the supply

and demand for labor. An increase in the demands and a proportional reduction in the supply of

the same increased the wages of the workers who worked in America, while on the same if there

were a reduction of demand would proportionately reduce workers' wages. The demand curve of

products in 1970 was determined by the marginal product of labor and the prices of goods and

the labor produced during the time. When the demand curve shifted to the same, the wages also

had to shift upwards (Wilmers, 2018). Consequently, the labor supply was determined by the

population size and was also determined by the work preferences, the skills of the jobs required

during the period’s well, which also determines the occupations' wages.

Performance and Pay

Productivity was another structural economic activity that influenced workers' total

wages in the early the last 50 years in America. If an employee were very productive, then the

marginal wages or revenue would be higher, meaning if the worker would have an extra hour of

work, then the output also increased, and inconsequently, there would be an increase in the

wages. This made the productive employees was earning higher wages than those who worked
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less. On the same, less and productive employees earned fewer wages. By this, many of the

industries that had been formed during the past 50 years used this strategy to increase the

company production by increasing the employees' wages. Theoretically, there was a relationship

between job performance and overall wages (Xiao, 2020).

Conclusion

In America, various social aspects contributed to low earnings among the Americans, as

discussed in the paper? Education was the main determinant on what one wage would get in a

particular job; on the same, there was much racism in the nation where the people of color were

highly humiliated and given only a small pay as compared to the white. Notably, the low-wage

Americans were not the only work that had been affected by the stagnant wages and the

inequality in the nation. The middle class was also affected by the low wages paid. Even those in

the colleges also experienced the same. For the last fifty years, the wages have been stagnant,

and between early 2009 and 2013, the wages had already fallen bottom to more than 90%. On

the same, the wages for the 70 for college graduates have also been flat.
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References

Binder, A. J., & Bound, J. (2019). The declining labor market prospects of less-educated

men. Journal of Economic Perspectives, 33(2), 163-90.

Fishback, P. V., & Seltzer, A. J. (2021). The rise of American minimum wages, 1912–

1968. Journal of Economic Perspectives, 35(1), 73-96.

Gellman, E., & Rung, M. (2018). The Great Depression. In Oxford Research Encyclopedia of

American History.

Luce, S. (2017). Living wages: a U.S. perspective. Employee Relations.

Sacerdote, B. (2017). Fifty years of growth in American consumption, income, and wages (No.

w23292). National Bureau of Economic Research.

Schmitt, J., Gould, E., & Bivens, J. (2018). America’s slow-motion wage crisis: four decades of

slow and unequal growth. Economic Policy Institute publication. Available online at

https://www. epi. Org/publication/americasslow-motion-wage-crisis-four-decades-of-

slow-and-unequal-growth-2.

Wilmers, N. (2018). Wage stagnation and buyer power: How buyer-supplier relations affect U.S.

workers' wages, 1978 to 2014. American Sociological Review, 83(2), 213-242.

Xiao, P. (2020). Wage and employment discrimination by gender in labor market

equilibrium. Unpublished Manuscript, Yale University.