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Despite a substantial increase in productivity since 2000, wages haven’t grown much.
A new report from the Economic Policy Institute found that overall economic productivity has increased 27.3 percent since the start of the millennium, yet since then average hourly compensation for private workers has increased just 6.5 percent. (Meanwhile, look at this chart of Consumer Price Index data for how much prices have inflated since then.)
“Wage growth has significantly underperformed productivity growth regardless of occupation, gender, race/ethnicity, or education level,” the report said. Here’s what else it says:
- Between 2007 and 2012, wages fell for the bottom 70 percent of workers, despite productivity growth of 7.7 percent.
- Even prior to the recession, wage growth was weak. Between 2000 and 2007, the median worker’s wages grew by 2.6 percent, despite productivity growth of 16 percent. The bottom 80 percent of workers saw wage growth of just 4.6 percent for the period.
- For the bottom 60 percent of workers, wages were flat or declined between 2000 to 2012.
- Between 2007 and 2012, only workers with an advanced degree (just 11.4 percent of the workforce in 2012) saw any wage growth. Wages declined for all other education groups, including those with bachelor’s degrees.
The Washington Post, writing about the study, noted that the figures don’t include health benefits or pensions, but says that “it’s easy to overstate the importance of that caveat.” Regarding more spending on health care, it added, ” in many (if not most) cases it doesn’t improve peoples’ lives as much as just giving them that money would.”
The study concludes, “The weak wage growth since 1979 for all but those with the highest wages is the result of intentional policy decisions — including globalization, deregulation, weaker unions, and lower labor standards such as a weaker minimum wage — that have undercut job quality for low- and middle-wage workers.”
Do you agree? Are you better off than you were in 2000 because of your pay? Let us know on Facebook.