Tuesday, September 23rd, 2014
Mostly True
Foroohar
"The median male worker in this country has not seen a raise, inflation adjusted, for 30 years, basically."

Rana Foroohar on Friday, January 10th, 2014 in a CNN interview

Time's Rana Foroohar says median male worker hasn't seen a raise in 30 years

Rana Foroohar said on CNN that, “The median male worker in this country has not seen a raise, inflation adjusted, for 30 years, basically.”

For all the advances since the era of teased-out rocker hair, one thing hasn’t changed for America’s average working man: the amount of bacon he brings home.

So says Rana Foroohar, a CNN global economic analyst and Time magazine assistant managing editor (who, by the way, snagged the first interview with new Federal Reserve chair Janet Yellen). Appearing on CNN’s The Situation Room with Wolf Blitzer, Foroohar brought up the point during a general discussion about the country’s economic woes.

"You know, I have to jump in on this because we are living in a time when the corporate share of the overall economic pie is as high as it has been in decades," Foroohar said. "Meanwhile, the median male worker in this country has not seen a raise, inflation-adjusted, for 30 years, basically."

Foroohar’s eye-popping statistic about median male worker income is certainly interesting. We wanted to know if it is correct.

Comparing 1982-2012

The U.S. Census Bureau proved a go-to source. The bureau’s September report on income, poverty and health insurance coverage in 2012 contains text and tables outlining historical changes (or lack thereof) in earnings for both men and women.

Foroohar referenced median earnings, which experts say is a better measure than the average because the income difference between the country’s rich and working-class earners is stark.

In 2012, the latest year for which data is available, the median full-time, year-round male worker earned $49,398.

In 1982, exactly 30 years earlier, earnings in 2012 dollars were $48,152.

So from 1982 to 2012, there was actually an inflation-adjusted raise of $1,246. But that’s more because Foroohar is looking at two years in isolation.

Tracking the income of median male workers over time shows that incomes climbed steeply from 1960 to 1970. But the figure has ebbed and flowed and remained mostly stagnant since 1970, dipping as low as $46,841 in 1996 and reaching a high of $51,670 in 1973. (You can view the table on page 50 of the report.)

Point being: You could just as easily widen or shrink Foroohar’s 30-year window by a few years and find a number that supports her point.

Median earnings of the 2012 male worker are down compared to his counterpart 25 years ago (who earned $50,166 in 1987), 35 years ago ($50,480 in 1977) or 40 years ago ($50,074 in 1970).

Even though Foroohar’s window shows a 2.6 percent pay increase between 1982 and 2012, it’s really "pretty close to flat," said Gary Burtless, a senior fellow in economic studies at the Brookings Institution.

"It means that male median earnings increases just 0.085 percent per year (that is, 85 one-thousandths of a percentage point per year)," he said.

Some say men are even worse off

Foroohar’s larger point, while technically correct and oft-repeated, misses the larger economic picture and is actually too generous, argues Michael Greenstone, an economics professor at the Massachusetts Institute of Technology.

Greenstone co-authored a 2012 New York Times post with Brookings fellow Adam Looney that presented another way to examine median male wages. Instead of counting only the earnings of men with jobs, as the Census Bureau does, Greenstone factored in all working-age men. Factoring in men without jobs brings down the median income.

The fraction of men in the workforce has declined sharply over the last several decades, he wrote, from 94 percent of prime-age men working in 1970 to 81 percent in 2010. It happened as incarceration rates and enrollment in the Social Security disability insurance program increased and labor force participation waned, as well as the "wild success" of women entering the labor market, he said.

His 2012 study found real earnings of median males actually dropped by 19 percent since 1970, he found. "This means that the median man in 2010 earned as much as the median man did in 1964 — nearly a half century ago."

The reasons for the trend are complex, Greenstone told us. Yes, there have been sweeping changes in technology, machinery and trade over the last 30 or 40 years that have had some effect. More striking, he said, is that educational attainment among men, which used to climb with each generation, has dropped off.

"The decline in working is concentrated among the men who have lower levels of education," Greenstone said. "It’s not concentrated among the college-grad guy who is married to a super successful woman."

Michael Saltsman of the conservative Employment Policies Institute also argued the idea of "stagnant" wages is more controversial than it seems -- to a different end. He cited a 2012 study in the National Tax Journal that analyzed middle-class income from the past three cycles. Instead of using pre-tax income data, the researchers expanded the income definition to include taxes, income transfers and fringe benefits.

"Middle-class Americans are found to have made substantial gains, and these increases are even larger when including non-cash income, such as the ex-ante value of health insurance," the report says.

Meanwhile, the earnings of female workers isn’t cited as often as a metric of the economy because their participation in the workforce jumped sharply over the last 50 years.

In any case, the 2012 full-time, year-round median female worker earned $37,791, according to census figures. In 1982, when about half as many women were working, median earnings were $29,731.

Our ruling

Foroohar said, "the median male worker in this country has not seen a raise, inflation-adjusted, for 30 years, basically."

Federal data for 1982-2012 shows a slight increase, though the numbers show the real value of median male earnings have been in the range of $46,840-$51,670 for about 40 years. We found another point of view that says the real median income has declined significantly once men without jobs are factored in. We also found a broader definition of income that changes the dynamic.

Still, Foroohar clearly has a point. We rate her claim Mostly True.