Now let’s change our focus – from looking at growth rates and factory output to examining how these trends have affected people and how much they earn. Chart Seventeen shows how the hourly wage paid to American workers in the private sector as a whole has changed since 1964 – after adjusting for the effects of inflation. The inflation-adjusted (or “real”) hourly wage is the best single measure of a workers’ worth in the global economy. Unlike figures on family income, it’s not significantly affected by direct government decisions (like the level of welfare payments), or by financial forces having little to do with performing a job (like the impact of stock market movements on dividend payments), or by the number of workers in a household. And unlike weekly wages, the hourly wage is not affected by overtime. As Chart Seventeen shows, real wages in the private sector peaked more than 30 years ago, and even after the 1990s boom remain well below those early-1970s levels. Never before in American history have wages sagged for so many for so long. Can it be a coincidence that the great opening of the U.S. economy to international trade began in the early 1970s?

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