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  3. American Economic Review
  4. May 2011
  5. Real Wage Index Numbers

Real Wage Index Numbers

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Abstract

Real wage index numbers have been used to measure movements in the standard of living of the typical worker. This paper describes some of these indicators for the United States and England. A new real wage index is proposed that resembles the sliding scale used to adjust wages in certain industries years ago. This new index is applied to US manufacturing industry and it implies a fall in real wages by about 40 percent since 1960. Workers' distributional position in US manufacturing has deteriorated considerably.

Citation

Pencavel, John. 2011. "Real Wage Index Numbers." American Economic Review, 101 (3): 565-70. DOI: 10.1257/aer.101.3.565

JEL Classification

  • C43 Index Numbers and Aggregation; leading indicators
  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
  • J31 Wage Level and Structure; Wage Differentials
  • L60 Industry Studies: Manufacturing: General