The Not-So-Golden Age

by Reihan Salam

After acknowledging that wage growth has failed to keep pace with productivity growth in recent decades, Scott Winship reminds us of one of the downsides of the economic Golden Age of the 1950s and 1960s:

[P]erhaps all the wage-productivity gap is signaling is the death of a patriarchal regime in which male workers were overpaid relative to their productivity because we were intent on keeping women in the home. For decades earlier in the twentieth century, men actively fought to shelter themselves from female competition—pushing for a minimum wage for women in order to limit the extent to which female workers could pull the union wage down to a market-clearing one, demanding that union contracts require women workers to be let go if they got married, promoting the famous five-dollar-day in Ford factories (only for men).

Don’t get me wrong, the erosion of this regime has been a kick in the gut for less-skilled men, and we have done too little to help them adjust. It has been a boon for married women though, whose labor force participation rose steadily for decades from the 1940s (before men’s wages started stagnating) through the 1990s. The problem is not a general one of the rich appropriating the workers’ pay. Instead, it is possible that top earners and shareholders would have had something like 1929- or 2013-sized incomes during the Golden Age of the American economy—except that they, too, bought into the male breadwinner family-wage regime even at the expense of their own financial self-interest. In fact, if you start in the mid-1930s at the time of the Wagner Act’s passage that spurred union growth, median compensation and productivity have increased by roughly the same amount—it’s just that an initial period of too-rapid wage growth was followed by a long period of wage adjustment. Labor’s share of income has dropped at the same time, and the share of income going to the top one percent has risen.

The intellectual historian Thomas Leonard has discussed the various ways in which eugenic thought informed Progressive era labor market regulations:

In the United States,where nearly all Progressive Era labor legislation applied to women exclusively, laws regulating women’s work were promoted for the benefits thought to obtain when women were removed from paid employment. Leading progressives, among them women at the forefront of labor reform, advocated excluding women from the labor force on the grounds that (1) work outside the home threatened women’s health and morals; (2) working women usurped jobs that rightly belonged to male heads of household entitled to a “family wage”; and (3) women in the labor force improperly abandoned their eugenic duties as “mothers of the race.”

The progressive justifications for women’s labor legislation were diverse. Paternalists invoked women’s health; moralists invoked women’s virtue; “family wagers” sought to protect fathers from the economic competition of women; “maternalists” promoted the virtues of motherhood; and eugenicists advocated for the eugenic health of the race. But all of these different justifications for women’s labor laws shared two common characteristics: all were founded upon invidious distinctions between the sexes, and all argued that society is better off when women are excluded from work for wages.

As exclusionary labor legislation has faded away, and as cultural norms have shifted so that women are expected to be full participants in the market economy, women are competing with men on a more equal footing, and one result is that some men have fallen behind. The entry of women into the workforce strikes me as salutary development, yet it seems odd to lament sluggish wage growth for men without also noting that it is to some extent a byproduct of this salutary development.

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.