In a recent segment on CNN’s State of the Union, United States Senator Bernie Sanders of Vermont addressed the factors contributing to the Democrats’ challenging performance in the lead-up to the 2024 elections. Sanders emphasized that the underlying issue is not merely messaging, but rather the enduring struggles of the American economy for the average citizen over the past several decades.
Senator Sanders asserted that when accounting for inflation, current weekly wages are considerably lower than those from five decades ago, reflecting what he described as a significant transfer of wealth from the lower 90 percent of earners to the top 1 percent. His framing suggests a drastic economic divide, calling attention to income inequality in the United States.
However, a closer examination of economic data reveals a more nuanced perspective. The widely accepted measure of inflation-adjusted wages, referred to as “real wages” or “median usual weekly earnings,” indicates a different trend. According to benchmarks dating back to the first quarter of 1979, real wages have risen cumulatively by 10.7 percent over the past 50 years, suggesting a gradual but noticeable positive shift in workers’ earnings relative to inflation.
While this increase translates to an average annual wage growth of only 0.2 percent above inflation, it still signifies that wages have, in fact, kept pace with or even surpassed inflation over this period. Moreover, recent analyses by organizations such as the Economic Policy Institute further corroborate that wages across all income brackets—ranging from the lowest 10 percent to the top tiers—are higher in 2023 than they were in 1973.
Senator Sanders has drawn comparisons to wage levels from February 1973, which marked a peak due to temporary price controls enacted during President Nixon’s administration. This historical context is vital, as the subsequent removal of those controls led to a rapid decline in wages. Data from September 2024 indicates that current wages are actually 2.8 percent higher than in the same month four decades prior, countering Sanders’ assertion that wages have deteriorated.
Critics argue that focusing on selected data points can obscure the broader picture of wage growth. The average work week has also contracted by nearly 10 percent, a shift that many workers may perceive as a choice to trade some financial compensation for increased leisure time.
In summary, while discussions surrounding wage stagnation and inequality remain critical in the current economic discourse, a thorough analysis of available data reveals a more optimistic outlook concerning inflation-adjusted wages over the past 50 years.
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