Wall Street Journal Opinion Page July 20, 2010 “Real Wages Don’t Tell the Whole Compensation Story”
by: Geoff Ficke
Greg Tarpanian’s response to the article by Lee E. Ohanian (The Right Way to Raise Wages) is incorrect on a number of counts.
GDP growth in the 1960’s as compared to the last 2 decades was indeed higher than in the last two decades but in percentage terms only, owing to the much smaller size of the economy five decades ago.
Mr. Tarpanian’s lament that if real wages had risen at the rate of growth of GDP over the last 40 years the current annual real wage for non-supervisory workers would be around $60,000 per year, instead of the $30,000 it is today. His key descriptive, non-supervisory” is telling. The U.S. economy has evolved to a knowledge based economy that values and produces technology and is fueled by education and skills. We don’t, and won’t, make low or no-value added products here when they can be produced so much more inexpensively in second and third world countries. The non-supervisory, blue collar rote factory jobs so prevalent in the 1960’s have been devalued and replaced by the realities of our constantly evolving scientific, knowledge based economy.
Finally, Mr. Tarpanian, like so many union acolytes, ignores reality. Unions kill industries. Autos, glaziers, steelworkers, stevedores, airlines, ship building, shoes, garment and so many more once thriving trades and industries (look what the SEIU and AFSCME have done to hamstring government) have either left for greener pastures, been bankrupted or been replaced by mechanization that indeed increases productivity.
Unskilled, undereducated workers in highly industrialized countries will never be able to appreciably increase their wages as long as the world continues to desire and reward producers for providing technology advances that improve lives at reasonable costs. Unless, and until unions recognize this reality they remain obviated and there will remain a permanent divide in real wages.
