## The fastest growth in wage inequality between men happened in 2015

In my new paper on trends in wages in 2015, I discuss the resurgence of the growth in inequality. The main story of 2015 wage trends is that they were very unequal—so much so that the fastest growth in wage inequality between men happened in 2015.

Wage inequality can be measured in a number of ways. For example, there’s the growth of the top 1 percent compared to the bottom 90 percent. For that, we can look at Social Security wage data and find that from 1979 to 2014, wages at the top grew nearly 150 percent, while the bottom grew less than 17 percent. That’s a really stark difference, but we don’t have data yet that would allow us to see what happened in 2015.

Using the Current Population Survey Outgoing Rotation Group (CPS-ORG), we can look at what happened to wages in 2015 at every decile and the 95th percentile (but no higher because of data limitations). There are two key ways gaps we can look at within those data limitations. One compares the middle to the bottom (the 50/10 wage ratio) and the other compares the top to the middle (the 95/50 wage ratio). In my paper, I show how the 50/10 wage ratio has been fairly steady for the last 15 years. In fact, for men, the 50/10 wage ratio for men was about the same in 2015 as it was in the late 1970s.

The 95/50 wage ratio for men has markedly grown over the last 35 years. In 2015, we saw the single largest one-year increase in the 95/50 wage ratio on record.

The chart below illustrates two trends. First, the line graph (using the right axis) shows the cumulative percent change in the 95th and 50th percentiles of the men’s wage distribution since 1973. While the 50th percentile (those in the middle of the wage scale) has actually fallen over this period (-4.6 percent), the 95th percentile (those at the top) increased by over 50 percent (+51.4 percent). The blue bars represent the year-over-year change in the 95/50 wage ratio in each year. The bars above zero reflect an increase in the 95/50 wage ratio—in other words, an increase in inequality between those in the middle and those at the top. This can be accompanied by falling median wages and rising 95th percentile wages or simply larger increases (or smaller declines) at the top than the bottom. For instance, in 1986, we see a large reduction in inequality (the blue bar is negative) driven by losses at the top and gains at the bottom: the red and green lines are getting closer together.

Wages

#### Largest one-year jump in men’s 95/50 wage ratio on record: Cumulative percent change in real hourly wages for men and year-over-year change in the 95/50 wage ratio, 1973-2015

Year Change in 95/50 wage ratio Cumulative percent change in 50th percentile wage  Cumulative percent change in 95th percentile wage
1973 0.00% 0.00%
1974 -0.03 -1.02% -2.22%
1975 -0.01 -1.02% -2.81%
1976 0.01 -1.27% -2.67%
1977 0.01 -0.37% -1.16%
1978 -0.06 0.27% -3.06%
1979 0.03 2.13% 0.10%
1980 -0.03 0.56% -2.70%
1981 0.09 -1.53% -0.68%
1982 0.06 -2.27% 1.19%
1983 0.10 -3.60% 4.36%
1984 0.04 -4.06% 5.62%
1985 0.09 -3.14% 10.75%
1986 -0.13 -0.38% 7.82%
1987 0.09 -0.96% 11.23%
1988 0.05 -2.85% 11.42%
1989 -0.05 -5.64% 6.21%
1990 0.05 -7.10% 6.54%
1991 0.03 -7.31% 7.66%
1992 0.04 -8.08% 8.44%
1993 0.07 -8.86% 10.49%
1994 0.05 -10.42% 10.72%
1995 -0.05 -9.07% 10.45%
1996 0.02 -9.68% 10.65%
1997 0.05 -9.11% 13.38%
1998 -0.04 -5.86% 15.54%
1999 0.01 -3.48% 18.83%
2000 0.06 -2.89% 22.12%
2001 0.04 -1.54% 25.48%
2002 0.04 -1.07% 28.04%
2003 0.04 -1.90% 28.70%
2004 0.10 -3.07% 31.46%
2005 -0.02 -3.90% 29.40%
2006 0.01 -4.06% 29.69%
2007 -0.01 -2.47% 31.43%
2008 0.06 -3.03% 33.46%
2009 0.07 -0.34% 40.24%
2010 0.05 -2.92% 38.77%
2011 -0.01 -5.49% 34.61%
2012 0.18 -5.74% 41.90%
2013 -0.01 -6.72% 40.10%
2014 -0.04 -6.99% 37.83%
2015 0.23 -4.60% 51.43%

The data below can be saved or copied directly into Excel.

Note: The xth-percentile wage is the wage at which x% of wage earners earn less and (100-x)% earn more. Sample based on all workers ages 18–64.

Source: EPI analysis of Current Population Survey Outgoing Rotation Group microdata

Copy the code below to embed this chart on your website.

More importantly the largest one-year increase in the 95/50 wage ratio occurred in 2015, when both the 95th and 50th percentiles experienced wage increases, but the increase for the 95th was much larger. For men, the 95th percentile wage increased by 9.9 percent compared to only 2.6 percent at the median. While we have made welcome progress toward pre-recession labor market conditions in recent years (i.e., the falling unemployment rate), rapidly growing wage inequality is not a feature of the pre-recession we wanted back.