Wages continue to grow slowly, despite job recovery

Snapshot for October 3, 2007.

Wages continue to grow slowly, despite job recovery

by Liana Fox

Since 2001, median wages in nearly half of all states have failed to keep pace with inflation. From 2001 to 2006, 21 states experienced real wage decline, while only two states, Arkansas and North Dakota, experienced real annualized wage growth of at least 2.0% per year (see figure). While the national economy recovered jobs lost from the last recession, wages for middle-income workers remained stagnant. During this period, national median wages increased only 1.2%, or 0.2% per year. In the previous five years, 1995 to 2000, median wages increased 1.5% per year.

Falling labor standards are partly to blame for this slow wage recovery. Additionally, the shift from high-wage manufacturing jobs to low-wage service-sector jobs has affected median wages.

Annualized percent change in real median wages, 2001-2006

Wages continue to grow slowly, despite job recovery