Article • Dean Baker’s Beat the Press
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An article that reported on Detroit’s plans to cut wages and benefits for its employees told readers:
“meanwhile, entry-level office workers earn just $17,000 a year. Similar work paid $7,000 a year in 1970.”
It would have been helpful to point out that prices have roughly quintupled in the last 40 years. This means that it would take a salary of $35,000 a year to be equivalent to the $7,000 a year that was reportedly paid in 1970. This means that the real wage for entry level positions has been more than cut in half even though productivity has more than doubled over this 40 year period.
It would also have been helpful to point out that many public sector employees are not covered by Social Security. This means that the 911 operator, whose $24,000 pension was highlighted in the article, may not have any other source of retirement income.