How Much Should You Be Making?

In honor of EPI’s new initiative, Raising America’s Pay, we updated our wage calculator, which shows how much you would be making if wages had kept pace with productivity. Having wages for the vast majority of American workers keep pace with productivity is a key indicator of an economy that is working for all.

Economic inequality is a real and growing problem in America, but the discussion around addressing inequality too frequently sidesteps a crucial component: the key to shared prosperity is to foster wage growth for the vast majority of Americans who rely on their paychecks to make ends meet. In fact, raising the pay for most Americans is the central economic challenge of our time—essential to ameliorating income inequality, boosting living standards for the broad middle-class, reducing poverty, and sustaining economic growth.

Crucially, the large and growing wedge between productivity and typical workers’ pay is not inevitable. For example, in the three decades following World War II, wages did rise with productivity and living standards improved throughout the income distribution. Since then, however, the rewards to a growing economy over the last three-and-a-half decades have primarily accrued to those at the top (except for the period of tight labor markets in the late 1990s). Since 1979, the workforce is more educated, is working more, and produces more goods and services in every hour worked. And yet the vast majority of workers are not reaping the rewards of their increased productivity.

The chart above shows economy-wide productivity alongside hourly compensation of production and nonsupervisory workers—i.e., wages for the vast majority of American workers. From 1948 until 1973, wages grew right along with productivity. But between 1979 and 2013, productivity grew 64.9%, while wages grew just 8.2%. Therefore, productivity grew eight times faster than typical worker compensation. (Much of this productivity growth accrued to those with the very highest wages. The top 1 percent of earners saw cumulative gains in annual wages of 153.6% between 1979 and 2012—far in excess of economy-wide productivity at 64.9%.)

What would your paycheck be if wages had kept up with productivity? Take a look, and share with your friends. And remember that the vast majority of American workers should be earning more than they are. To learn more about what has happened and what we can do about it, visit the website for the latest EPI project, Raising America’s Pay.

What should you be making?

Americans' wages have lagged further and further behind productivity gains since the late 1970s, but it wasn’t always this way. After World War II, our pay rose with productivity—the more we made, the more we were paid. Today, the gap between American workers’ productivity and their wages is at an all-time high. What could you be making if wages had grown with productivity?

Enter your current annual wage:

If wages had kept up with productivity over the last three decades, your pay would be closer to:

Find out why

Source: Economic Policy Institute | Methodology | Replay

This post was updated on 6/4/2014.

  • Joe Krall

    This analysis makes no sense. If so many Americans are ‘worth’ more, they should move to a competitor or even better, start their own company. Too many people just want to punch a clock and collect a paycheck. That attitude leads to lower pay.

  • The_Pilgrim

    Maybe if we’d stop experimenting with Keynes’ Marxist-based busted theories that have failed every time they’ve been tried in every economy around the world, including the US during the Great Depression and again in the 70’s, our wages would have kept pace with inflation.

    Of course, any “good” economist knows that Keynes’ theories cause inflation…

  • RJSuperfreaky

    This assumes a correlation between productivity and effort by the laborer. Yet certainly some of the increase in productivity seen over the last few decades is due to improvements in technology and processes more related to physical capital and innovation, than by increased effort by the laborer.

    So if a business owner buys a machine that allows a laborer to double their individual productivity while working at the same effort, is the laborer due more compensation for this? Yes, their productivity in doubled, but one could argue that similarly, their effort per unit is half of what it was, as well.

  • Doug

    More incentive to get training in fields that pay better. If you’re in a field that doesn’t pay well and you want to get paid more, do something about it and get training in something that pays well. Duh.

    • Sean Hellems

      Then someone else will come in and take that job, and get paid the same low wages. It doesn’t matter who’s working the job. They should be paid enough to live a decent life.

      • Doug

        So by your logic no one should get training in anything.

        • kidcat24

          Then don’t complain about Reagan’s greatest acting gig……… Convincing you that the poor people had all the money.

          • John

            Reagan?!?!? Well, at least we moved away from George W. Albeit, back another 30 years.

        • By your logic we live, not in the nanny state, but the authoritarian daddy state whose job is to whip us into shape with the threat of poverty into doing productive things, like going broke over educations which no longer even translate into employment and which require debt that we can no longer file for bankruptcy on.

    • How can you say that with a straight face when the cost of education has beat inflation every decade since president Bonzo decided that education was a private investment rather than a public good? You can’t even file for bankruptcy on education debt, duh, and it increasingly doesn’t translate into employment post graduation, duh.

  • Mark7Seven

    We don’t need a “calculator” to determine what a fair wage is for a particular job. The free market should determine that number. You are worth what you are worth for the work you do as determined by those who must run the business that you seek to work for. Otherwise, start your own business and then you can do the work that suits what you should be paid.

    Exceptional wages for exceptional effort, education and dedication.

    • Sean Hellems

      This calculator DOES show the “free market” wage before the corporations started taking the money and putting it at the top. We’re not talking about “exceptional” wages. We’re talking about a just, living wage. Businesses should be compelled to pay such a wage, and if they don’t want to, then they shouldn’t be doing business in the American economy.

      • Doug

        And who exactly are these angels who will decree what a “just living wage” is? A bureaucrat working for a corrupt Washington politician bought and paid for by a labor union??

        • Tie the minimum wage to the consumer price index. This isn’t rocket science. If you can’t pay a wage sufficient for a single person to support themselves without government assistance, then you have no business being in business. We already fought a civil war to end slavery. It’s not “work or starve,” it’s “work and starve,” and this is not an acceptable basis for a civil society, nor is it even a sustainable or functional one.

          As for unions, they’ve been decimated over the last three decades, shrinking from 30% of the workforce when we had prosperity and a middle class, to around 7% today.

          • Doug

            Gunter I recognize your desire to help other people raise their standard of living. You can try to persuade business owners to adopt this view. That’s your right. The problem comes when you take it upon yourself to use the power of government to inject yourself into a business relationship between two individuals. You have a view of what a just wage would be for citizen A paying citizen B for citizen B’s labor. However, citizen A and B have the right to come to their own agreement without you interjecting your view of what is just much less your demands that they pay what your view of a just wage is and enforcing it with the threat of government force. You have a view of what is just, but you don’t have a right to force other citizens to live by your view of what a just wage is – even if you can get ten or one hundred or thousands to agree with you. Just as you don’t have the right to force someone to mow your lawn for nothing, you don’t have the right to force a business owner to pay what your view of a just wage is. Even if you have a majority opinion, you don’t have the right to force that opinion on others. That’s what the Bill of Rights is for – protecting minority opinion.

          • John

            Unions can’t stop offshoring. They just get union dues and watch your job go away.

          • Doug

            And who decides what is sufficient for a single person to live on?

          • The consumer price index. It’s simple numbers. If this wage doesn’t pay for housing, food, medical care, and transportation, it is not sufficient to live on. You can pretend it’s more complicated than it is but it doesn’t mean anyone else will take it seriously.

          • Doug

            What kind of housing? Is a studio apartment enough? What if a mother has six children? What is sufficient nutrition? Should you be deciding this for other people? What is sufficient medical care? Should you force other people to pay for your birth control? Where did you get this right to make all these detailed decisions for other people?

      • TheBrett

        It only showed the pay numbers, not the value of total compensation versus productivity (which includes non-wage compensation such as health care benefits). That’s a pretty big omission, considering how rapid health care costs have gone up over the past couple of decades.

      • John

        Which is why they have offshored hundreds of thousands of jobs and stop doing business in this American economy.

    • Brian Justis

      The “free market” determines that those with 4-year degrees are worth $30,000 to start and those with a masters are worth $40,000. This isn’t free market, that it depressed/suppressed wages buddy. Suggesting otherwise shows a clear lack of knowledge on the subject.

    • Jim L Cunningham

      But the “free market” isn’t free. It’s systematically stacked against American workers and consumers by large corporations who use their power to tilt the field in their favor.

    • OakenTruncheon

      There is no free market, it’s a wholly owned subsidiary of the banking cartel.

    • John

      Sounds good and I mostly agree, however, the amount of regulation that our gov’t has created chokes a lot of opportunity to start a new business.

    • 1234heythere5

      The market isn’t free when the 1% control what workers are paid.

      The market isn’t free when the government bailed out the banks and Wall St. who produced nothing of value.

      Exceptional income not necessarily made from productive work or exceptional effort or education has come to some through inheritance and manipulation of laws and loopholes to avoid taxes as well as outsourcing and insourcing work and privatization of work that was formerly done by workers who made a living wage. The ratio between CEO’s pay in Europe is much less than in the US which suggests that the pay for CEOs in the US and administrators are overpaid for what they accomplish and the ones who do the actual work are underpaid.

  • Joe Krall

    Why does the calculator estimate someone making $15k/yr should get a 77% raise while someone making $100k only gets a 20% raise? If you are using productivity growth, why does the percentage raise drop as income increases?

  • Melissa G Thrower

    Price fixing by corps. They are united in their greed.

    • John

      and in bed with Washington D.C.

  • benleet

    Half of U.S. workers in 2012 earned less than $27,519. That median annual income could have been $43,629, according to this calculator. Which country would I prefer to live in, China, Mexico, or the U.S.? Which is safer has more freedoms and civil rights, a judicial system that functions without corruption, for the most part? Would my life be a little easier if all my neighbors had income around $43,629? Is that realistic? Is this nation capable of drawing all workers above poverty and not bankrupt ourselves? The lower-earning 50% of workers, 77 million of them, earned less than 6% of all all the income the economy created.
    See the Social Security report: — Half earned around $740 billion, and total income was $13.743 trillion, less than 6% of total. Workers are not paid well relative to the abundance of income the economy creates, and 20 million out of 160 million, roughly, can’t find any employment. Higher incomes for the lower-earners would generate more employment. The argument is too simple. Who would be harmed or have to sacrifice? Only those who have so much they don’t know what to do with it — the top 1% earns more than the lower 60%, collectively.
    See this report:

  • TheBrett

    Those are just wages, though. If you factor in the health insurance and other benefits, the gap is probably a lot narrower.

    • OakenTruncheon

      Health insurance is a flow thru. That’s kinda like your employer subsidizing a profitable middle-man sector.

    • John

      I don’t think so. Most people’s benefits, including health insurance, have been diminished by most companies. Most of us now need to pay more out of our pockets and our pensions have been significantly slashed.

  • John

    The million dollar question is, where in the US will the jobs come from? Technology has eliminated many jobs, manufacturing is basically gone, neither corporations or the government act on what they sell about keeping jobs in the US. An economy can’t be maintained with most people in a service industry.

  • Marty Smith

    I am a tool and die maker. When I joined this trade there were 10 adds a day for this kind of work and I could get at least 5 of them and then pick the best one. Now you are lucky to find 1 add every 6 months. Most tool makers have moved on to nursing or some other job with complex requirements. Now I have much less competition and am still working and making a tool makers salary. Technology did not eliminate my trade. China did. We get our large tools made overseas but you still need me to make it run. And if something goes wrong then it is unlikely that you will send it back to China to get it fixed. The point is, you need to get a trade that cannot be sent overseas. It’s nice to sit in front of a computer and make a good living, but too many people are already doing that. Do something that is really needed and learn to be good at it and you will always have a way to survive. Sometimes you need to lower your expatations and learn to do something useful even if it is not what you wanted. My friend got a masters degree in biology, and he can tell you things about insects that you would never imagine, but when he got out of school, he still needed to pay his mortgage, so he took a job putting your name on pens because it paid his bills. It seems that all those years of using a computer made him an asset to this company. It paid his bills. Now, 30 years later he is using his skills as a biologist to make a living, nice, but it still took 30 years. It’s not what you learn, It’s what you do.