The New Deal Worked: Rising wages

Above: Formerly-jobless Americans, now WPA workers, get their paychecks in Detroit, Michigan, ca. 1935-1943. Photo courtesy of the National Archives.

The New Deal increased wages

During the New Deal, wages increased. For example, here is the year-by-year, average weekly earnings for American manufacturing workers:

1929: $25.03 (Stock Market crash; caused by "limited government" fanaticism.)

1930: $23.25

1931: $20.87

1932: $17.05

1933: $16.73 (New Deal starts; more policies for regular Americans, less pampering the wealthy.)

1934: $18.40

1935: $20.13

1936: $21.78

1937: $24.05

1938: $22.30

1939: $23.86

1940: $25.20

1941: $29.58

1942: $36.65 (Full involvement in World War II starts; thus, even more government spending.)

1943: $43.14

1944: $46.08

1945: $44.39

Not only did workers earn more per week, but they also worked less. For example, in 1929 manufacturing workers worked an average of 44.2 hours per week to earn their $25.03. By 1940, they were only working 38.1 hours to earn $25.20. Less time at work means more time with family and friends, more time for recreation, and more time to simply rest.

(Source of statistics: "Employment and Earnings," U.S. Bureau of Labor Statistics, August 1960, p. 29.)  

The New Deal increased real wages too

It's a good thing, of course, when wages increase; but it's even more meaningful when "real wages"--that is, wages as compared to the cost of goods and services--increase as well. Because that means paychecks are going further and have more value. And during the New Deal, real wages skyrocketed. Policies for the people, such as work-relief for the unemployed, protections for unions to negotiate better wages, and massive infrastructure projects, lifted American workers up.

Above: This chart shows real wages for American workers, for the periods 1871-1913 and 1924-1944. Notice the period of stagnation, from 1924-1933, followed by a supercharged increase during the New Deal years. This chart is from Gerhard Bry, "Wages in Germany, Great Britain, and the United States," p. 278, in Gerhard Bry (ed.), Wages in Germany, 1871-1945, Princeton University Press, 1960. Image used for educational, non-commercial purposes.

Today, we settle for the illusion of wage increases

Above: "False Dimensions," a lithograph by Lucien Labaudt (1880-1943), created while he was in the WPA, ca. 1935-1943. Image courtesy of the General Services Administration and the University of Michigan Museum of Art.

All across the mainstream media, and all across the Internet, centrist and right-wing economists and commentators have been telling us how wonderful things are. Trump and his supporters tell us that he's worked magic with the economy and we're all doing better, thank God! But here's the funny thing: Trump's own Bureau of Economic Analysis (BEA) tells us that our paychecks aren't going as far as they used to. For example, in the Real Earnings Summary for July, we learn that for most workers, "From July 2017 to July 2018, real average hourly earnings decreased 0.4 percent" (and the BEA real earnings reports before this one paint the same general picture of stagnation or reduction; also see "For most U.S. workers, real wages have barely budged in decades," Pew Research Center, August 7, 2018). 

Why the discrepancy, between what we're told and reality? I would suggest the following three reasons:

1. Trained to flap our flippers at the wrong economic indicators

Collectively, we've been trained to judge the economy primarily by the stock market and the unemployment rate. But what good is the stock market to the average American if nearly all the gains end up in just a few wealthy hands? And though the unemployment rate is important, it has little impact on workers who are already employed. Ask yourself: Has your paycheck corresponded with the unemployment rate? In other words, when unemployment goes up, does your paycheck go down? And when unemployment goes down, does your paycheck go up? Some people might respond, "yes," but I bet most would respond, "not really."  Again, the unemployment rate is important, but not nearly as important to most workers as other indicators, such as real wages, consumer debt, and apartment rental costs.

2. Our team captain MUST be praised 

The second reason (many of us) have been convinced that the economy has made an amazing recovery is because critical thinking has taken a back seat to the cult of personality. Tens of millions of Americans don't analyze reports, numbers, history, and statistics; instead, they just nod their heads to whatever Donald Trump, Sean Hannity and, for that matter, Hillary Clinton and Barack Obama tell them. In other words, the reality is less important than the propaganda. The propaganda makes them feel good, makes them feel like they're on the winning team.

3. The rich like us stupid

The third reason we're being duped is because it benefits the rich. If we think we're doing great, even when we're clearly not, then we're less likely to seriously challenge the status quo of inherited wealth, tax evasion by the rich, financial fraud, usury, stock market manipulation, ruthless barriers to debt relief, etc. The rich know this, so they provide a steady supply of funding to their puppets in government, media, and think tanks - more and more cash to feed the propaganda juggernaut.

Reality check

Here's the painful truth: The New Deal improved our paychecks for decades. But the period after that, roughly the last 40 years or so, has been sh&t for most Americans. Goosestepping behind Dear Leader--be it Trump or be it Obama--doesn't change that reality.