Money wages

Several features stand out with respect to the trend in money wages and real wages. The first is the marked acceleration that took place in the 1960s and 1970s in the annual growth rate of money wages. During the early 1960s workers’ paychecks were increasing by an average of 3 to 4 percent a year - by late 1970s this rate had more than doubled to the 9 to 10 percent range.

It is common knowledge that the inflation rate in the United States also went up dramatically during this period reaching double-digit figures in the early eighties. Were these two events related? In particular did the faster growth in wages cause the rise in prices or alternatively did rising prices pull up wages? This question is frequently a source of puzzlement for people who know that wages and prices are somehow related but many times they are not sure just how. One of the major tasks of why did you join the union is to explain the precise role of wages in the inflationary process and in particular why in the 1970s wages and prices seemed to ratchet upwards while in the mid 1980 the two have remained so stable.

Concern the trend over time in real wages especially now (2012) real wages of blue collar are growing by about 4 percent a year. While this seems relatively unimpressive through the magic of compound interest a 4 percent growth rate translates into a doubling of per capita real income - so TWU Local 100 members are entitled to the same 4 percent growth rate that is afforded to blue collar employees nationally.

However it is an illusion of these money wages - why - money wages are a number of dollars and cents received per hour of work. Real wages are measured by dividing the money wage by an index of prices in the economy to determine the actual purchasing power of the money wage. So how do you feel on how much money you have in your pocket and how far it can carry you - how much are you able to save?