Real wages The chapter has presented data on relative wages of high-skill and low-skill workers. In this question, we look at the evolution of real wages.

a. Go to the website of the most recent Economic Report of the President and find Table B-15. Look at the data on average hourly earnings for production and non-supervisory employees in 1982-4 dollars (i.e., real hourly earnings) for the earliest and the latest data in this table. How do real hourly earnings in the earliest data compare to real hourly earnings in the latest year for which data are available? Are there periods in between where real hourly earnings in the private sector fell?

b. Given the data on relative wages presented in the chapter, what do your results from part (a) suggest about the evolution of real wages of low-skill workers since 1974? What do your answers suggest about the strength of the relative decline in demand for low-skill workers?

c. What might be missing from this analysis of worker compensation? Do workers receive compensation in forms other than wages?