GDP and (Female) Median Income

Most of you are probably familiar with the GDP vs Median income graphs showing that since around the 1970’s, GDP has been growing faster than median income. This has lead to various theories as to why this is the case. Common explanations range from technology change, higher premiums for education, globalization, to the conspiracy Brenton Woods Accord. What all of these seem to fail to explain adequately is that if you look only at Female Median Income, GDP and Female Median Income both are rising equally. See picture below.

Keep this in mind next time someone offers a grand explanation for the supposedly “stagnant” wages.

Economist Alex Tabarrok, blogging at Marginal Revolution, has more here.

7 Responses to “GDP and (Female) Median Income”

  1. Jon says:

    Is this basically saying that women are being forced into the workforce? Not surprising as avg hourly wages are down since the 70’s. Fixed expenses are up. People are just getting squeezed.

    What’s this Bretton Woods conspiracy you speak of? I don’t know how the word “conspiracy” applies.

  2. Jon,

    You write, Is this basically saying that women are being forced into the workforce?

    I’ve read my post three times and I can’t seem to understand how in the world you got women are being forced into the workforce out of it?

    What this is saying is that whatever you attribute stagnant wages from the 1970’s onward (technology change, higher premiums for education, globalization, immigration, Brenton Woods Accord etc) it clearly doesn’t apply to women: Their wages HAVE BEEN keeping up with GDP. When it comes to stagnant wages, women have been exempt!

    My point is that whatever theory fails to explain this surprising phenomenon is not a complete theory.

    So take a stab at it: why would women’s wages not stagnate?

  3. Jon says:

    What is female income/capita? It’s the total income earned by females divided by the total # of females.

    So in 1950 maybe 1 in 50 females were in the work force let’s say. Let’s say she made $50K corrected for inflation. GDP/capita for females is $1,000. Pretty low.

    But today 40 in 50 females work. Let’s say they make exactly the same. $50K. GDP/capita for females is $40K. So it went up a lot. But their wage rate didn’t go up at all. It’s flat. Working females still make $50K.

    That’s why I say this chart shows us that more females are entering the work force. It doesn’t mean their wages are rising. I’m just saying that’s what it seems to be showing, but maybe I don’t know what it’s telling us.

  4. But this isn’t female GDP, this is total GDP. And it shows women’s wages pretty much keeping up with it.

    So stagnant wages seems to have alluded them. How so?

  5. Jon says:

    Oh, you’re right. It’s median female income, not female GDP/capita.

    I would think there were fewer full time female workers before. As the years go by more and more become full time. What I think you’d need to look at is hourly pay rate for females for full time workers only.

    Even that would be tough to interpret because in the past females probably held on average lower level positions. To me it’s tough to draw any conclusions from this.

  6. But here is the thing, this is roughly HALF (indeed, if you look at stats like this it might be more than half soon) of labor participation. Yet their wages have kept up with gdp/capita. Your explanation can help explain some of it, but what about the last, say, 20 years?

    In other words, this whole stagnant wages thing is a male phenomenon not a labor one.

  7. […] there are various answers that could be given to such claims (see here, here, here and here for a few) but my favorite is to look at the ‘deregulation era’ from the eyes […]

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