ductivity included an increase in human capital, an
increase in the amount of physical capital, and im-
provements in technology. The increase in human
capital arose from higher educational attainment.
The proportion of the population aged twenty-five
and older who had graduated from high school rose
from 78 percent in 1990 to 84 percent in 2000, and
the proportion of college graduates increased from
21 to 26 percent. The increase in the amount of
physical capital (primarily buildings and equip-
ment) per worker probably raised labor productivity
about one-half of one percent per year. Improve-
ments in technology included many highly visible
examples, such as computers and telecommunica-
tions. Robots came to play a major role in fabricating
automobile components.
Wages and Other Incomes Economists expect that
labor’s reward will reflect labor’s productivity. How-
ever, estimates of real wages, hourly and weekly, by
the Bureau of Labor Statistics suggest an increase of
only 4 or 5 percent from 1990 to 1999 for private
nonagricultural jobs. However, the estimates of total
compensation of employees, after adjustment for in-
flation, give values of approximately $21,500 per
worker for 1990 and $24,000 for 1999, expressed in
prices of 1982-1984. This represents an increase of
about 11 percent. Much of the difference arose from
the rising cost of fringe benefits such as health insur-
ance.
Different data estimate median real incomes ad-
justed for inflation. (The median is the value in the
middle, when all items are arranged in order of
size.) The median income for families in 1993 (the
first year for which estimates are available) was
$50,782 in 2006 dollars. By 1999, it was $59,088. The
increase of 16 percent closely matches the rise in la-
bor productivity.
Labor union membership declined slightly. There
were 16.7 million union members in 1990 and 16.3
million in 2000. Private-sector membership de-
clined by more than one million. This brought the
proportion of members among private-sector wage
and salary workers down below 10 percent, continu-
ing a long-term trend dating from the 1950’s. Much
of the decline could be attributed to falling employ-
ment in manufacturing, the domain of many tradi-
tionally strong militant unions. Another factor, visi-
ble in the automobile industry, was the relocation of
the industry into areas traditionally not strongly fa-
vorable to unionization. With this trend came a de-
crease in interruptions of work by strikes. The de-
cline in union membership was vigorously resisted
by the Service Employees International Union
(SEIU), headed by Andy Stern. This union aggres-
sively undertook to organize a number of low-income
occupations such as janitors, security guards, and
hotel maids.
Consumption spending per capita, after adjust-
ment for inflation, increased more than disposable
incomes. The result was that personal saving fell
from its longtime average around 8 percent of dis-
posable personal income to only 2.4 percent in- Household debt burdens increased. Con-
sumer credit and home mortgage debt totaled about
$3.4 trillion in 1990 and rose to $6.2 trillion in 1999.
This raised the ratio of debt to disposable income
from 81 percent in 1990 to 93 percent in 1999. The
decrease in the personal saving rate continued into
the next decade. It contributed to the country’s
large import surplus and helped explain the large
inflow of foreign capital.
Poverty Government poverty estimates are built
up from estimates of the cost of an adequate diet. In
1990, the poverty threshold for a family of four was
$13,359. Adjustments for rising prices brought the
figure to $17,604 for year 2000. About 34 million
persons were in poverty in 1990, representing 13.5
percent of the population. The number increased to
39 million during the subsequent recession, then de-
clined to 33 million in 1999, which was 11.9 percent
of the population.
The incidence of poverty was particularly heavy
for female-headed households. Children in such
households face particularly difficult life situa-
tions. The number of children in poverty rose from
12.7 million in 1990 to nearly 15 million in 1993,
then declined to 11.7 million in 1999. The last figure
included about one-sixth of all children.
Profits and Stock Prices The decade was very prof-
itable for corporations and investors. Corporate
profits after tax rose from $264 billion in 1990 to
$517 billion in 1999, just about doubling. High prof-
its helped fuel a strong boom in prices of corporate
stocks. The Standard & Poor’s index of stock prices
rose from 335 in 1990 to 1,327 in 1999, setting new
records frequently along the way. Stock prices rose
much more than profits, in part because of declin-
ing interest rates. Interest-bearing assets became less
The Nineties in America Business and the economy in the United States 135