Show me where the money went!

Heavens, it’s been a long since I’ve updated, mostly because I’ve been too busy to make note of much to write about. However, I’m taking some classes again and I was struck by a discussion in one of them.

Our instructor was explaining about how company structures in the USA had changed since the 1960’s and gone from a hierarchial, department structure to team oriented, product focused groupings. As a result of this reorganization, there were many middle layers of management that were taken out in order to streaminline the organization, which meant that the company was able to spend less to put out the same products.

So, I was thinking, the company saved money and prices have been cut on some products, but not necessarily a whole lot comapred to prices and wages in the 1960’s, so where’d the money go? Basically, can someone show me where the money went?

I got to thinking about this more and I’ve been noticing more articles about how wages have not really kept up with the prices of things, such as houses and cars. My parents bought their first hours for $16,000 and my Dad’s salary was probably around $4,000 to $6,000 a year at that time, so it was around a 4 to 1 difference between wages and the price of a house. Cars were several hundred and food was comparably cheaper and of higher quality as well.

Now, for example, in California, the average wage is $35,000 a year and the average price of a house is above $300,000, which is 10 to 1 difference. A middling car starts of equivalent quality to those 1960’s cars starts at around $20,000. Hmm, quite a bit of difference in the ratio of salaries to those purchased items. Food has stayed at about the same ratio in regular grocery stores, but the quality seems to have gone down. I remember eating Red Delicious APples growing up and they were really good. Now, if I eat one from a grocery store, it has no flavor and chews more like mush then an apple. So, am I really getting the same value my parents did?

Finally, in our local paper there were two articles one Sunday, which really seemed to capture the difference in wages between now and the 1960’s. One article was about the loss of jobs and earning power of USA workers since the 1970’s and the more recent loss of jobs due to the problems in the economy, job outsourcing and other factors. Which makes it look like the money is ending up with people doing regular work in our country.

The next article was at the bottom of the page and was about CEO’s and other company heads are receiving even more bonuses and higher salaries in the last year and that these raises continue a trend that has been going on since the 1970’s and 1980’s.

Hmm, so who can show me where all the money went?

Some links to articles of interest:
CEO Salaries on rise again
Weak Job Growth