Wages Haven’t Grown Much in More Than a Decade

By on

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.

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

Check out our hottest deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,036 more deals!

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • I.Popoff

    I agree. Even in a government job as I had, they started demanding more work for the same pay. Our union seemed to sell out to management at every turn. The atmosphere at work became poisonous. What had once been a good job that I enjoyed going to, became a source of unhappiness. The greed of top management knows no bounds. The business ethos of today is that all the money must go to the top, and the more money there is to sit on the better. Lower and middle level employees are undeserving and merely cogs in the machine.

    • Jorge

      Good comment. To understand how we got to this point a good read is “The Sociopath Next Door” by Dr. Martha Stout. Sociopaths (born with no conscience and live their life with no conscience or remorse as they claw their way to the top) are heavily represented in upper positions of government and the military, as CEOs of major corporations (Wall Street, oil/chemical companies, etc.). Why are there so many billionaires trying to become the first trillionaire while they oppose paying their fair share of taxes and they favor a low or no minimum wage)?