Slow, Uneven Wage Growth Undercutting Other Economic Factors

August 9, 2018
Pouring maple syrup on blueberry waffles
Photo: Unsplash/Lindsay Moe

The current real average wage, accounting for inflation, has the same purchasing power as in 1978, according to new analysis by the Pew Research Center

Wage growth that has occurred has mostly gone to the highest-paid workers, putting greater focus and energy behind efforts to raise the minimum wage, narrow the gap of income inequality, and congressional races. In 2016, Americans in the top one-tenth of income distribution earned 8.7 times that of Americans in the bottom one-tenth. The Pew Research Center reports that annual growth has been between two and three percent since the start of 2013, but were rising by 4 percent prior to the crash of 2007 and 2008. In the 1970s and early 1980s with higher inflation, wages regularly increased by between seven and nine percent annually. 

On the face of it, these should be heady times for American workers. U.S. unemployment is as low as it’s been in nearly two decades (3.9 percent as of July) and the nation’s private-sector employers have been adding jobs for 101 straight months – 19.5 million since the Great Recession-related cuts finally abated in early 2010, and 1.5 million just since the beginning of the year.

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