Study: America Hasn’t Had a Pay Raise in 35 Years

Disturbing data on incomes for college grads suggest that United States can't educate itself out of the problem.

Study: America Hasn’t Had a Pay Raise in 35 Years Photo (cc) by bradleypjohnson

There’s been a lot of talk about raising the minimum wage lately, and it is good that workers at Wal-Mart, T.J. Maxx and Marshalls will soon have a little more money in their paychecks. Now, what about the rest of the country? Stagnant wages are a chief component of The Restless Project.

Another comprehensive report issued by the Economic Policy Institute revealed recently that Americans’ wages are stuck in neutral — have been since the recession began — and if you look at the long haul, American workers really haven’t gotten a raise since 1979.

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That’s depressing enough, but what’s really disturbing about this latest report is that the wage stagnation applies across all demographics and education levels. Critically, even college graduates have seen their wages drop slightly since 2007, which suggests something that’s hard for many economists to get their heads around: We aren’t going to educate our way out of wage stagnation.

“In fact, among all education categories, the greatest real wage losses between 2013 and 2014 were among those with a college or advanced degree,” the report says. “Workers with a four-year college degree saw their hourly wages fall 1.3 percent from 2013 to 2014, while those with an advanced degree saw an hourly wage decline of 2.2 percent.”

While the headline unemployment rate has continued to improve, leading to a lot of backslapping in Washington, D.C., and elsewhere, the real story of the economy remains much more muddy.

More highlights from the ECI report

  • From 2013 to 2014, real hourly wages fell at all wage levels, except for a miniscule 3-cent increase at the 40th percentile and a more significant increase at the 10th percentile.
  • Wages grew at the 10th percentile because of minimum-wage increases in 2014 in states where 47.2 percent of U.S. workers reside. This illustrates that public policies can be an important tool for raising wages.


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