Should-Read: Elise Gould: The State of American Wages 2016

Briefing: Elise Gould: The State of American Wages 2016: “More broadly, shared wage growth from 2015 to 2016 does little to reverse decades of rising inequality…

…Wage inequality has been rising since the late 1970s—a trend that largely stems from intentional policy choices that have eroded ordinary workers’ leverage to secure higher pay (Bivens et al. 2014). These policy choices—made on behalf of those with the most economic power—include allowing the minimum wage to stagnate, eroding workers’ rights to bargain collectively, and prioritizing low inflation over low unemployment. Policies such as these have resulted in hourly pay for the vast majority of American workers stagnating despite growing economy-wide productivity, with economic gains highly concentrated at the top. Wage growth since the Great Recession has continued to follow this trend: slower growth for most and faster growth for those at the top.

Talking Points:

Since 2000 wage growth has been consistently stronger for high-wage workers, continuing the trend in rising wage inequality:

• Those with college or advanced degrees saw average wage growth of 8.5 percent and 6.9 percent, respectively, from 2000 to 2016
  • The bottom 50 percent of workers with a college degree still have lower wages than they did in 2000 or 2007.
  • The pulling away at the top of the wage distribution cannot be explained by the rising college wage premium.
• Wage growth since 2000 was faster for white and Hispanic workers than for black workers.
  • The bottom 60 percent of black workers have seen their real wages decline since 2007
  • Black–white wage gaps are larger today than in 2000
  • Black–white wage gaps by education were larger in 2016 than in 2000
• The gender wage gap at the median has narrowed: a typical woman now earns 83 cents on the male dollar:
  • The regression-adjusted gender wage gap is currently 22.0 percent.

From 2015 to 2016, wage growth was more evenly distributed:

• Median wages–the 50th percentile–grew 3.1 percent.
• The 20th percentile–those poorer than 80% of the population—experienced a striking 6.4 percent increase