Joseph Stiglitz, an economist who won the Nobel-Prize for his work in information economics, observed in a recent column that, “for male workers, inflation-adjusted median incomes are lower today than they were in 1968.”
The data Stiglitz used came from a recent Census report. (Scroll down to Table P-5, “People by median income and sex ▪ all races”). In constant dollars, the median income for U.S.men in 2010 was lower than it was in 1968 ($32,127 in 2010, $32,844 in 1968).
Curious about the exclusive focus on the experience of U.S. men during this period, I shifted my eyes to the data on women reported in a parallel column. Unremarked on by Stiglitz, the Census data for women provides a striking contrast to the data for men during the same period.
While median income for men has basically stagnated in constant (2010) dollars since 1968, median income for women almost doubled during the same period, from $11,089 in 1968 to $20,831 to 2010, an increase of 87.8%. While the median income in 2010 for women in 2010 was 64.8 percent of the median income for men, this increased from 1968 when the median income for women was 33.7 percent of the median income for men.
For female workers, inflation-adjusted median incomes in 2010 are lower today than they were . . . in 2007. And even then, for women, the median income in 2010 was only $92 less than it was in 2007. Median income for women were higher in 2010 than for every year prior to 2007.
Moreover, looking at the Census data for both genders suggests a partial hypothesis for why we’ve more or less seen stagnation in median income for men since 1968.
Between 1968 and 2010, the number of men in the workplace grew by 68.6 percent. Over this same period, the number of women participating in the paid workplace more than doubled, increasing by a whopping 118.7 percent. Prior to 1979 there were more men working in the paid workforce than women. Since 1979, women have outnumbered men in the paid workforce every year.
If the ratio of women in the workforce to men remained what it was in 1968, there would today be 24 million fewer women in the workforce than there actually were in 2010. Put another way, the increase in the supply of labor during this time (most of which came between 1968 and 1979) was disproportionately a result of increased female participation in the workforce.
Further, that women’s median income increased more-or-less consistently during this time period (through around 2001) suggests that women were increasingly competitive for better paying jobs relative to men. Even without any increase in female participation in the paid workforce, an increase in the competitiveness of women for better-paying positions would tend to reduce salaries for men: as better-compensated women “sorted up,” they would edge out the men who once held those positions. In essence, a significant amount (although not all) of the monopoly rent for being male in the workforce dissipated since 1968.
I doubt that the increase in the supply of labor disproportionately derived from increased female participation in the U.S. workforce explains all, or even most, of the income stagnation for men since 1968. But the influx of women into the paid workforce, and the apparent increasing competitiveness of women for better-paying jobs, would seem to be a likely explanation for at least a part of the stagnation in median incomes for U.S. men.