If you compared an accountant, attorney, or IT employee working for California to a FAANG equivalent, the compensation would probably be in the 40-60th percentile.
Why? The job roles have shifted. A large state DMV in that era was probably 90% clerical, with 12-15k workers. Now they are 80% professional with 2-4K workers. An organization like a Department of Labor probably employed 5-7k tabulators, statisticians and clerical staff, all replaced by computers, spreadsheets and a small number of professionals tending to those processes.
In a bank, similar things happened. Armies of tellers are gone and only exist as salespeople today. Nobody is data entering check numbers. And cash disappears, the overhead of dealing with it does too.
In private sector as a whole, the trend is the opposite. Labor transformation and technology displaced workers and dumbed down jobs. Look at retail - malls are empty and run with skeleton crews… stores manage surges by putting staff on call, and making customers do labor for them.
That is not surprising given how much more government subsidized, via central bank operations and programs like GSE-guaranteed mortgage-backed securities (now issued at a rate of $1.7 trillion a year, to provide financial institutions with massive zero-risk investment returns), and regulated (centralized), banking has become.
>>A large state DMV in that era was probably 90% clerical, with 12-15k workers. Now they are 80% professional with 2-4K workers.
The private sector has also become more professionalized.. It's not just banking that has become more automated amongst private industries.
Government compensation has increased for teachers, police, paramedics, etc, because they have increasingly powerful lobbies able to extract increasingly generous concessions from the political parties in power.
In the 1950s, the vast majority of public sector workers did not have collective bargaining agreements with their employer. That has dramatically changed as public sector unions have gone from strength to strength. This is a systemic phenomenon across the advanced economies, resulting in spending patterns like this:
https://ourworldindata.org/grapher/social-spending-oecd-long...
Unions strengthened civil service and reduced patronage. Do you want your kids taught by uneducated hacks?
The private sector has massively automated as well. The better explanation is that the growing gap between private and public sector wages is due to public sector labor unions and the proliferation of collective bargaining agreements that they've secured for themselves, and the fact that the government (unlike private industry), does not easily go bankrupt under the weight of union demands.
>>Unions strengthened civil service and reduced patronage. Do you want your kids taught by uneducated hacks?
Teachers unions have reduced spending efficiency in education:
https://academic.oup.com/qje/article-abstract/111/3/671/1839...
It would be extremely difficult to contribute enough money to a 401k, since it’s basically a lifetimes earning for someone making 80k a year.