WAGES, PRODUCTIVITY, AND THE PRICE LEVEL
One of the major characteristics of the American economy has been the substantial and continuing rise in real wages.1 While limitations of information hinder the precise measurement of wage trends, there is little doubt that workers in the United States have experienced a remarkable increase in income. Data on wages, costs of living, and hours of work are available as far back as 1840, although in the earlier part of that period statistics on certain relevant matters, especially on the prices of goods bought by wage earners, are sketchy and incomplete.
During the two decades prior to the Civil War, when industrialization in the United States was just beginning, there was a clear upward trend in the real wages of factory workers. Although agricultural earnings undoubtedly tended to hold down the level of wages in manufacturing, during the period 1840-60 nominal hourly earnings rose by 25.6 per cent and "real" average hourly earnings by 22.7 per cent,2 or by about 10.9 per cent per decade. (See Table 25 for a summary of changes by decades, 1840 to 1959.)____________________