FIGURE 31.1 Productivity, Family Income, and Wages, 1970–2004
This chart tells a complex and not altogether happy story. The median hourly wages of American workers (adjusted for inflation) stagnated between 1970 and 1995. The rise in median family income reflected the increasing proportion of two-earner families, as more married women entered the workforce. The dramatic increases in productivity did not lead to higher wages for workers. Rather, businesses used those gains either to cut prices to compete in the global marketplace or to reward owners, shareholders, and, particularly, corporate executives.