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.

Click for report
Click for report

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.
  • Only those at the top of the wage distribution have real wages higher today than before the recession began.
  • Across the distribution, men’s wages remain higher than women’s, but women have seen a slightly bigger increase than men since 2007.
  • Workers of color continue to have hourly wages far below those of their white counterparts. In 2014, the median black and median Hispanic wages were only about 75 percent and 70 percent, respectively, of the median white wage. All three groups have median wages in 2014 lower than in 2007.
  • Looking at wages by educational attainment, the greatest real wage losses between 2013 and 2014 were among those with a college or advanced degree. This demonstrates that poor wage performance cannot be blamed on workers lacking adequate education or skills.
  • Those with the least education actually saw a reversal in trend, likely related to the state-level minimum-wage increases.
  • Despite wage declines in both 2013 and 2014, those with an advanced degree are the only ones who have returned to 2007 real wage levels.
  • Nominal wage growth, by any measure, is far below wage growth consistent with the Federal Reserve Board’s 2 percent inflation target.
  • There is no evidence of upward pressure on wages — let alone acceleration of wages — that would signal that the Federal Reserve Board should worry about incipient inflation and raise interest rates in an effort to slow the economy.
Click to learn about The Restless Project
Click to learn about The Restless Project

Sign up for Bob Sullivan’s free email newsletter.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
Never Buy These 19 Things Online
Never Buy These 19 Things Online

The internet has changed how we shop. But for many things, you’re still better off buying the old-fashioned way.

9 Hidden Ways to Get More Out of Amazon
9 Hidden Ways to Get More Out of Amazon

You don’t have to be a Prime member to take advantage of these little-known perks of shopping on Amazon.

Stop Overpaying for These 10 Common Purchases
Stop Overpaying for These 10 Common Purchases

The best price for many of these items is “free.”

8 Common and Costly Homebuying Myths
8 Common and Costly Homebuying Myths

Think you’re ready to buy a house? Don’t fall victim to these rookie mistakes.

7 Secret Perks of Individual Retirement Accounts
7 Secret Perks of Individual Retirement Accounts

IRAs come with bells and whistles that many other accounts lack — including some perks you may not know exist.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.