Wage Growth Stagnation Hits Men Harder Than Women, What's The Cause?

Lifetime real earnings of the median male worker declined by 10% from those who entered the US labor market in 1967 to those in 1983, or roughly a loss of $136,000.

Median Lifetime Earnings by Cohort for US Males

A study on Lifetime Earnings in the United States over Six Decades is worth a close look.

The study shows the United States shows a wage stagnation of average earnings and a rise in income inequality since the 1970s. The charts are based on US Social Security Administration (SSA) records over 57 years.

The charts are more than a bit confusing unless one carefully dives into the details.

The lead chart is titled "Median Lifetime Earnings" but shows instead annualized real (inflation adjusted) annual wages, not lifetime or real lifetime earnings.

Lifetime Definition

  • Lifetime earnings means earnings between the age of 25 and 55 inclusive.
  • Annualized lifetime earnings as depicted in the chart is the sum of real annual labor earnings from ages 25 to 55, divided by 31.

When nominal earnings are deflated by the personal consumption expenditure (PCE) deflator, the annualized value of median lifetime wage/salary earnings for male workers declined by $4,400 per year from the 1967 cohort to the 1983 cohort, or $136,400 over the 31-year working period.

The lifetime earnings of the median male worker declined by 10 percent from the 1967 cohort to the 1983 cohort. Further, more than three-quarters of the distribution of men experienced no rise in their lifetime earnings across these cohorts. 

Cohort Definition 

As used in the article, cohort means all of those who turned 25, 35. 45, etc. in a particular year. 

Key Notes 

A download of the Working Paper PDF provides these insights.

  • Median initial earnings fell from $33,300 for the 1967 cohort to $29,000 for the 1983 cohort (PCE adjusted in 2013 dollars). 
  • The analogous figures at age 55 were $55,900 for the former cohort and $54,100 for the latter, a decline of $1,800, showing no sign of catch-up over the life cycle.
  • Median initial earnings for men was only $24,400 in 2011, virtually the same level as in 1957.
  • Cohorts of female workers have seen robust and steady gains, on the order of 22% to 33% for the median female worker. However, because these gains started from a very low level of median lifetime earnings for the 1957 cohort, they were not large enough at the aggregate level to offset the losses by men.
  • Using the CPI rather than the PCE to convert nominal earnings to 2013 dollars lowers lifetime earnings growth for both men and women.
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