 All right, so average hourly earnings deflated by PCE and deflating by PCE gives you a correction for inflation. So what you get here is wages adjusted for inflation. Yellow is the 50th percentile, blue is the 30th percentile, red is the 20th, dark blue I guess is the 10th. Average hourly earnings for production and non-supervising workers, so these are blue collar workers, deflated by PCE at select points in the distribution, right? So from low to middle, so from 10th percent, that's the lowest distribution of earnings all the way up to the yellow, which is the median, the 50 percent. And you can see in all cases, wages were basically flat from the mid-1970s through the mid-1990s. And then they went up, and I would argue they went up primarily there because of increased efficiency and increased productivity. Increased productivity as a result of the 1980s, the 1980s, both the restructuring of American businesses, the introduction of computers, the introduction of technology in the early 90s and mid-90s, the introduction of the internet, all of that, the cumulative effect of all the progress that was made from 1980 on, really in terms of increased productivity, increased technology, increased use of technology, resulted in the fact that wages started going up again. In the mid-1990s, they went up nicely through the mid-2000s and then again stagnated for a while, at least at the lower end, and then increased significantly recently. Overall, wages today on a real basis adjusted for inflation, right? Adjusted for inflation are significantly higher than they were in the mid-1970s in spite of the fact that both the left and the right constantly hark back to a glorious past for the American labor, the way they earned a lot more money and wages have gone down and quality standard of living has gone down, all complete and utter nonsense, which we've talked about before in discussing inequality, all the stats regarding inequality, wages, and so on that we've been told about now for well over 10 years. There's just wrong. These are hourly wages, average hourly wages, right? For production and non-supervisory workers, right? So you can see up here, you can see the decline in 2020 in the 50th percentile, but all the other percentiles went up even during 2020. So what we have here is real progress, real success. And yet we observe in the world out there both, and again, both political parties are a real panic around this. And I think part of the panic is a result of something we talked about yesterday, which is the perception of people in workers, middle-class people, the perception that while their life is improving, people don't notice their improvement. What they notice is relative, and what they notice is that people who are not working, people on welfare, people who are not working anywhere as hard, anywhere as long, anywhere as intensely as the people we just saw in the graph, those people are making about the same as they are. We talked about this yesterday when we talked about inequality in the United States and the fact that in the bottom 60 percent there's immense equality, because government transfers have provided significant income support to people who are not working or working part-time or working at the lowest wages. So people at the middle see themselves working hard, struggling to make a living, and other people are not working at all and they're making exactly the same living as they are. And that is upsetting to people. I think people are also realizing they're going to have to change jobs, that the old kind of jobs don't exist anymore, that they can't expect to live a static life where nothing changes, that they're actually expected to grow and to change and maybe learn new skills and maybe move to a different city or maybe move to a different job. And all of that is upsetting. So the welfare state plus economic dynamism, I would call it, have all resulted in angst. And people like Donald Trump and the left take advantage of that angst. They tell, yes, we know your wages have not gone up. Lie. Yes, we know we're losing manufacturing jobs to China. Lie. Yes, the American hotline is devastated and in retreat. Lie. But they use that. They use their angst. They use the concern. They use the fact that people feel like and are being told now for a decade, over a decade, that their standard of living quality of life has not gone up. And it's hard. You know, it's hard to tell. It's hard to tell when you're actually living day to day. It's hard to tell if your life is improving or not. I mean, if the improvement is dramatic, then yes, it's easier, bigger house. But even if you go into a bigger house, you very quickly get used to the bigger house. Your standards. You get used to those standards. I mean, how many of you who are older, I'm not talking about young people. How many of you who are older remember life without an iPhone? I mean, it's hard to even remember it. It's hard to think about it. And so now when I think about my iPhone, I don't think about it improving my life. It's always been here. My life hasn't gotten better. And the differences between this iPhone, iPhone 13 and the iPhone 10 or iPhone 5, iPhone 4, I don't remember what the differences were. It's always been this fast. It's always been this good. It's always been this cool. So it looks like my life has been static. It doesn't look like it's been improving. You actually have to think about it to realize it. And it's everywhere. What was grocery shopping like before, I don't know, Trader Joe's or Whole Food? What was little things, little innovations that happen every single day that are all over the place, constantly improving our lives incrementally. Our lives are getting better incrementally. We can't see them. We don't know them. So for us, it seems static. It seems stagnant and static and stagnant. And then we're told by our intellectuals, and this is their crime. We're told by the intellectuals, oh yes, your earnings are down, your standard of living is down. The world is horrible. Everything's worse than it used to be. And it's not. What was life before Amazon? Before you could go online and buy anything, anytime, anywhere, delivered to any place, sometimes in less than 25 hours. It was like then. I don't know. I can't remember. We managed. But my life is improved because of Amazon. But I don't have, you know, most people don't have a strong sense of that. And so we think we're stagnating when we're not. We think the world is stagnant when it's not. We think the standard of living is not going up when it is. And we think wages are not budging, and yet they are. Partially because we're told. And of course, these wage numbers are for a variety of reasons, not completely accurate because they don't include things like benefits. Benefits was a very small part of wages in the 1970s. It's a very big part of wages today. Benefits benefit us. At least some of the benefits do. Some of them are wasted. But some of the benefits and so a significant portion of wages is that it's also true that households, this might be the Zali wages, but these Zali wages now fund smaller households. So they used to have households of four to six. Now the households are closer to two or three. So, you know, household size has changed dramatically. So for all kinds of reasons, the graph that I just showed you actually underestimates the progress that has actually been made. And the fact is the reality is that right now, right now, as bad as things are, as high as inflation is, as dumb as our government is, as evil as the programs that they're instituting are, as bad as our Federal Reserve is distorting or perverting our currency and making it more and more and more difficult for entrepreneurs to do their job in spite of all that. We have more jobless things than there are people. Indeed, there's a record number, record number of job openings. We had a great resignation. People feel comfortable enough to flip jobs and switch jobs. We've got rising private sector wages. Right now, in 2022 now, granted, it's not keeping up with inflation. In some cases it's not. And we've got labor shortages everywhere. So in spite of all the dooms saying and the stock market go down and all the bad stuff, which I know, I know all the bad stuff. When it comes to actually getting a job and having a job, now I can't guarantee that this will be true in a year, but right now is one of the best times ever. Michael just got a job at 3x what he was making before. Now I'm sure it wasn't easy and I'm sure he had a work hard at it and had to be patient and had a interview and struggle, but he got it. And indeed, the reason things are not a thousand times better, and there could be a thousand times better, you know, 20% better, 30% better, 50% better, is because our government left and right, Democrats and Republicans are ignoring what has actually helped labor throughout American history. Ignoring what makes America to this day a better place to work than pretty much anywhere else in the world. In terms of wages, the standard of living, in terms of quality of life. We're ignoring all that. We're ignoring what makes that possible, which is freedom, which is markets. Which is let markets do the job. I mean, one of the things that America still has is a relatively, relatively dynamic workforce. We still hire and fire. We still move. We still resign and leave and change and work and move around. We still have a vibrant private sector. Again, in France, your ideal job if you're a young person is to go work for the government. That's not true in America. And in America, we don't like the job you resign. You move. That entrepreneurial sense of trying to improve one's own life, one's own work, doesn't exist as much in Europe. Doesn't exist as much in Europe. So the real weakness of our labor market today are the things that prevent that dynamism. It is the, you know, the forced benefits, right? We get all these benefits from an employer, many of which we don't want. We don't need, we didn't ask for, but the government forces the employer to give it to us. Which distorts, I'll take home pay, which distorts, we don't get what we want. We get kind of the health insurance that our employer provides instead of health insurance customized to ourselves. We get all these other benefits that are clear that are really benefits for us. Would we buy them in a marketplace if our employer didn't provide them to us? Instead of that, we could get a higher wage. I think most of us would prefer that. It's hard to fire people in California. It's hard to hire people. We've got affirmative action. We've got a million different constraints in licensing laws, regulations, up to Brazil, which limit entrepreneurship, therefore limit job creation. Just imagine what this country would be like. Just imagine what this country would be like. If we actually had free markets in labor, if we actually got rid of regulations, it's hard to imagine. It's hard to contemplate because we'd be so rich. We'd be so successful. Life would be so much better. Life is pretty good. And that's why it's hard to imagine what it would be so much better in the future. And of course, government could do a lot to liberate labor markets and to make them more flexible by getting out of the way, by doing away with licensing laws. And, you know, for example, a lot of us today are working from home post COVID. But entrepreneurs can't start businesses at home because the home is not zoned for business. But imagine if governments loosened up on the zoning requirements and allowed home businesses to start. Imagine we get rid of all the restrictions, all the regulations, all the constraints on opening up a little store, opening up a restaurant. I mean, you would see massive amounts of entrepreneurship. And much of that would happen, by the way, in the poorest places in the country, among the poor. Who are often the ones who suffer the most from these kind of regulations and restrictions. I mean, we would, it's hard to believe how richer we would be. So yes, there are pockets of distress with workers. You see that primarily with, you know, less educated, significantly less educated working age men. Too many of them are dependent on government programs. Too many of them have given up. Too many of them had certain expectations about life and about their work life that have not been met. Too many of them are on drugs, alcohol, too many of them are committing suicide. There's real angst and one should ask and one should talk about and one should try to figure out what the cause of that is. But the cause of it is not, this I can guarantee you, the cause of it is not China. The cause of it is not technology. The cause of it is not capitalism. I think government plays a big role in causing it and I think a lack of education. I think a lack of values. I think a certain alienation from the world in which they live caused by really lack of values. Lack of connection to other people and lack of ambition. Because if you're ambitious, there's still opportunities in this world. There's still opportunities in this economy. You can still do amazing things, even without any education. And of course, what we know for sure is that the solution is not government. If you look at the laundry list of federal, state, local policies that's supposed to be pro worker, all they are is pro powerful interest groups. And workers, American workers as a whole are harmed by this. And what's amazing about the American economy is that in spite of all these restrictions, in spite of all these constraints, the American worker and the American economy still does okay. I mean, the Democrats and some Republicans, when they increase occupationalizing, you know, regulate housing even more. You know, provide all kinds of goodies from childcare and healthcare and welfare and gig work. Protecting gig workers as if they can't protect themselves. Tariffs. I mean, all these things do the exact opposite. They all destroy a privatized robust healthcare system with private insurance would be a lot better for all of us. A welfare system, a diminished welfare system would actually increase the amount of work that people do. Increase productivity. And take away some of the resentment I think exists in America against those who don't work yet still get money. And of course, tariffs just destroy jobs, just pure destruction. No benefit, zero. And they destroy jobs, they destroy many, many more jobs than they supposedly protect. And the thing that, anyway, so, by the way, I think the best kind of economics, I'd say policy blog, economic policy blog, the best economic policy content is being produced today by, and that's where I showed you the graph. And this is the, you know, a lot of this stuff is from the article by Scott Linsicum, who wrote an article a few days ago about Labor Day, better policies for all American workers, which is very good. But Scott Linsicum from the Cato Institute, and he writes at the dispatch, I think, I think he's, he's my favorite economics writer right now. I mean, not deep economics, not theoretical economics. We're talking about policy economics. I think he's elevated the work at that Cato Institute. I think he's done a fantastic job. And I encourage you all to sign up for his sub stack, sub stack. The capitalists, the capitalists, the capitalists, instead of capitalist, he's very, very good on these things. By the way, you know, a lot of left and right people on left and right people out there in the mainstream constantly are considered about manufacturing jobs. We've talked about this before. I mean, manufacturing jobs, who cares? Manufacturing jobs, the number of jobs, certainly in the percentage of jobs that are dedicated to manufacturing is, is declined significantly because we have robots to replace them. Indeed, the number of manufacturing jobs in China is declining significantly because of robots and machines and some jobs are moving to Vietnam or Bangladesh or Africa or who knows where. But what's so interesting or exciting about manufacturing? Indeed, manufacturing in the United States at least, manufacturing jobs require today, require education. Most significant majority of manufacturing jobs today require some kind of diploma, significant training, significant expense on education. It is not true anymore that you could just throw somebody at a factory who has no education and this is going to become less true in the future. It takes skill, some skill to operate a robot, fix a robot because that's where the jobs are going to be. The jobs are not going to be, you know, twisting things, manipulating things, carrying things. The job is going to be fixing robots, fixing machinery. The jobs are going to be transportation jobs, moving stuff. They're not going to be jobs that just require human muscle. Human muscles out, human muscle is finished. There is no role, a very little role for human muscle in today's economy. So even if you're uneducated, don't have a degree, you better develop some skills on how to operate some kind of machine or how to fix some kind of machine or how to transport something. Otherwise, you will have nothing. So modern economy is not anti-manufacturing, it's problem manufacturing, manufacturing more stuff today than we ever have. But it requires a different type of job. It requires workers with different types of skills. And indeed, the manual labor type of work that doesn't require any skills, yes, maybe working in a restaurant, it's going to be a service job. It's not going to be any manufacturing job. And indeed, even service jobs, I mean, service jobs, what is a service job? We used to think of service jobs as McDonald's, but service jobs are programming, service jobs are driving trucks, installation and repair, construction, building maintenance, those are service jobs. And many of those need real skills. People out there, what they need today is the incentive to go and constantly train and constantly retrain. And what does it mean to even talk about labor anymore? Right, who are we celebrating in labor today? Is labor just blue collar labor? Why? What's so special about blue collar labor? I mean, nothing much. I mean, it's the least value-added form of labor. Why don't we talk about the amazing labor that our software program is, and our builders who build robots, and the engineers who figure out how to put them together, and is that not labor? It is generally a significant shunning and putting aside and depreciating the value of the mind, of what actually produces stuff, what actually creates jobs and creates economic growth, and that is the human mind. We value muscle. In that sense, we value labor. But does the engineer not labor? Is there no work involved? I mean, that is such a Marxist-like myth. And so, unbelievably destructive, is it noble to lay bricks but not noble to design the bricklayers, to design the building, the skyscraper, for which the bricks belong? There is no nobility in muscle. There's nobility in work, but any type of work. Again, we're so influenced by, I think, two things coming out of this little spiel. One is by pessimism. Things are terrible, things are awful, nobody can succeed, nobody can move, nobody can achieve. And by a Marxist view of work, you need to do it with your hands. No, you don't. No, you don't. But even the people who do still work with their hands. Well, they need to upgrade. This is a big upgrade for manual labor. You get value from listening. You get value from watching. Show your appreciation. You can do that by going to www.uranbookshow.com. I go to Patreon, subscribe star locals, and just making an appropriate contribution on any one of those channels. Also, if you'd like to see the Iran Book Show grow, please consider sharing our content. Also, subscribe. Press that little bell button right down there on YouTube so that you get an announcement when we go live. And for those of you who are already subscribers and those of you who are already supporters of the show, thank you. 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