Many on the left suffer from economic nostalgia for what they call the Golden Age of the American economy: the 1950s and 1960s. Growth was rapid, inequality low, tax rates high, unions strong. Especially the bit about the unions. But Manhattan Institute scholar Scott Winship offers a different perspective on that era:
For decades earlier in the twentieth century, men actively fought to shelter themselves from female competition—pushing for low minimum wages for women in order to limit the extent to which female workers could pull down the market-clearing wage, 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.
In other words, men were overpaid relative to their productivity because as a society we were, as Winship puts it “intent on keeping women in the home.” It is a fascinating thesis that says if we want to return to that Golden Age, it will take more than just an incredible reversal of labor union power, it will take a complete reordering of society — in addition to other 1950s realities such as the wartime destruction of our economic competitors and the de-educating of their population.