Actually, the U.S. labor market remains very strong

It is indisputable that the U.S. labor market is strong. The share of the population ages 25–54 with a job is at a 23-year high, median household incomes rose 4.0% last year, and real wage growth over the last four years has been broad-based and strong. The economy has not only regained the nearly 22 million jobs lost in the pandemic recession, but also added another 6.5 million.

Are some folks still having a hard time? Absolutely. Even when the unemployment rate is low, there are still sidelined workers, and it remains difficult for many families to make ends meet on wages that are still too low. Unfortunately, that’s a long-term phenomenon stemming from a too-stingy U.S. welfare state, rising inequality, and the legacy of anemic wage growth during past economic recoveries. But when comparing the labor market with four years ago (during the pandemic recession) or even before the pandemic began, the answer is clear: More workers have jobs and wages are beating inflation by solid margins.

More people have jobs

If I had to pick one, the best measure of labor market strength is the prime-age employment-to-population ratio (EPOP). This measure takes into account population growth by looking at the share of the population between the ages of 25 and 54—and hence not a group likely to be in school or retired—who have a job. As shown in Figure A, this prime-age EPOP is now at 80.9%, the highest share since 2001.

Figure A

Prime-age employment-to-population ratio at 23-year high: Employment-to-population ratio of workers ages 25–54, 1989–2024

date Employment to population ratio
Jan-1989 80.0%
Feb-1989 79.9%
Mar-1989 79.9%
Apr-1989 79.8%
May-1989 79.8%
Jun-1989 79.8%
Jul-1989 79.8%
Aug-1989 79.9%
Sep-1989 80.0%
Oct-1989 79.9%
Nov-1989 80.2%
Dec-1989 80.1%
Jan-1990 80.2%
Feb-1990 80.2%
Mar-1990 80.1%
Apr-1990 79.9%
May-1990 79.9%
Jun-1990 79.8%
Jul-1990 79.6%
Aug-1990 79.5%
Sep-1990 79.4%
Oct-1990 79.4%
Nov-1990 79.2%
Dec-1990 79.0%
Jan-1991 78.9%
Feb-1991 78.9%
Mar-1991 78.7%
Apr-1991 79.0%
May-1991 78.6%
Jun-1991 78.7%
Jul-1991 78.6%
Aug-1991 78.5%
Sep-1991 78.6%
Oct-1991 78.5%
Nov-1991 78.4%
Dec-1991 78.3%
Jan-1992 78.4%
Feb-1992 78.2%
Mar-1992 78.2%
Apr-1992 78.4%
May-1992 78.4%
Jun-1992 78.5%
Jul-1992 78.4%
Aug-1992 78.4%
Sep-1992 78.3%
Oct-1992 78.2%
Nov-1992 78.2%
Dec-1992 78.2%
Jan-1993 78.2%
Feb-1993 78.1%
Mar-1993 78.2%
Apr-1993 78.2%
May-1993 78.5%
Jun-1993 78.6%
Jul-1993 78.6%
Aug-1993 78.8%
Sep-1993 78.6%
Oct-1993 78.7%
Nov-1993 79.0%
Dec-1993 79.0%
Jan-1994 78.9%
Feb-1994 78.9%
Mar-1994 78.9%
Apr-1994 79.0%
May-1994 79.2%
Jun-1994 78.8%
Jul-1994 79.1%
Aug-1994 79.2%
Sep-1994 79.6%
Oct-1994 79.6%
Nov-1994 79.8%
Dec-1994 79.8%
Jan-1995 79.7%
Feb-1995 80.0%
Mar-1995 79.9%
Apr-1995 79.8%
May-1995 79.7%
Jun-1995 79.5%
Jul-1995 79.7%
Aug-1995 79.6%
Sep-1995 79.8%
Oct-1995 79.8%
Nov-1995 79.7%
Dec-1995 79.7%
Jan-1996 79.8%
Feb-1996 79.9%
Mar-1996 79.9%
Apr-1996 79.9%
May-1996 80.0%
Jun-1996 80.1%
Jul-1996 80.4%
Aug-1996 80.5%
Sep-1996 80.4%
Oct-1996 80.6%
Nov-1996 80.5%
Dec-1996 80.5%
Jan-1997 80.5%
Feb-1997 80.4%
Mar-1997 80.6%
Apr-1997 80.7%
May-1997 80.6%
Jun-1997 80.9%
Jul-1997 81.1%
Aug-1997 81.3%
Sep-1997 81.1%
Oct-1997 81.1%
Nov-1997 81.0%
Dec-1997 81.0%
Jan-1998 81.0%
Feb-1998 81.0%
Mar-1998 81.0%
Apr-1998 81.1%
May-1998 81.0%
Jun-1998 81.0%
Jul-1998 81.1%
Aug-1998 81.2%
Sep-1998 81.3%
Oct-1998 81.1%
Nov-1998 81.2%
Dec-1998 81.3%
Jan-1999 81.8%
Feb-1999 81.5%
Mar-1999 81.3%
Apr-1999 81.3%
May-1999 81.4%
Jun-1999 81.4%
Jul-1999 81.2%
Aug-1999 81.3%
Sep-1999 81.3%
Oct-1999 81.5%
Nov-1999 81.6%
Dec-1999 81.5%
Jan-2000 81.8%
Feb-2000 81.8%
Mar-2000 81.7%
Apr-2000 81.9%
May-2000 81.5%
Jun-2000 81.5%
Jul-2000 81.3%
Aug-2000 81.1%
Sep-2000 81.1%
Oct-2000 81.1%
Nov-2000 81.3%
Dec-2000 81.4%
Jan-2001 81.4%
Feb-2001 81.3%
Mar-2001 81.3%
Apr-2001 80.9%
May-2001 80.8%
Jun-2001 80.6%
Jul-2001 80.5%
Aug-2001 80.2%
Sep-2001 80.2%
Oct-2001 79.9%
Nov-2001 79.7%
Dec-2001 79.8%
Jan-2002 79.6%
Feb-2002 79.8%
Mar-2002 79.6%
Apr-2002 79.5%
May-2002 79.4%
Jun-2002 79.2%
Jul-2002 79.1%
Aug-2002 79.3%
Sep-2002 79.4%
Oct-2002 79.2%
Nov-2002 78.8%
Dec-2002 79.0%
Jan-2003 78.9%
Feb-2003 78.9%
Mar-2003 79.0%
Apr-2003 79.1%
May-2003 78.9%
Jun-2003 78.9%
Jul-2003 78.8%
Aug-2003 78.7%
Sep-2003 78.6%
Oct-2003 78.6%
Nov-2003 78.7%
Dec-2003 78.8%
Jan-2004 78.9%
Feb-2004 78.8%
Mar-2004 78.7%
Apr-2004 78.9%
May-2004 79.0%
Jun-2004 79.1%
Jul-2004 79.2%
Aug-2004 79.0%
Sep-2004 79.0%
Oct-2004 79.0%
Nov-2004 79.1%
Dec-2004 78.9%
Jan-2005 79.2%
Feb-2005 79.2%
Mar-2005 79.2%
Apr-2005 79.4%
May-2005 79.5%
Jun-2005 79.2%
Jul-2005 79.4%
Aug-2005 79.6%
Sep-2005 79.4%
Oct-2005 79.3%
Nov-2005 79.2%
Dec-2005 79.3%
Jan-2006 79.6%
Feb-2006 79.7%
Mar-2006 79.8%
Apr-2006 79.6%
May-2006 79.7%
Jun-2006 79.8%
Jul-2006 79.8%
Aug-2006 79.8%
Sep-2006 79.9%
Oct-2006 80.1%
Nov-2006 80.0%
Dec-2006 80.1%
Jan-2007 80.3%
Feb-2007 80.1%
Mar-2007 80.2%
Apr-2007 80.0%
May-2007 80.0%
Jun-2007 79.9%
Jul-2007 79.8%
Aug-2007 79.8%
Sep-2007 79.7%
Oct-2007 79.6%
Nov-2007 79.7%
Dec-2007 79.7%
Jan-2008 80.0%
Feb-2008 79.9%
Mar-2008 79.8%
Apr-2008 79.6%
May-2008 79.5%
Jun-2008 79.4%
Jul-2008 79.2%
Aug-2008 78.8%
Sep-2008 78.8%
Oct-2008 78.4%
Nov-2008 78.1%
Dec-2008 77.6%
Jan-2009 77.0%
Feb-2009 76.7%
Mar-2009 76.2%
Apr-2009 76.2%
May-2009 75.9%
Jun-2009 75.9%
Jul-2009 75.8%
Aug-2009 75.6%
Sep-2009 75.1%
Oct-2009 75.0%
Nov-2009 75.2%
Dec-2009 74.8%
Jan-2010 75.1%
Feb-2010 75.1%
Mar-2010 75.1%
Apr-2010 75.4%
May-2010 75.1%
Jun-2010 75.2%
Jul-2010 75.1%
Aug-2010 75.0%
Sep-2010 75.1%
Oct-2010 75.0%
Nov-2010 74.8%
Dec-2010 75.0%
Jan-2011 75.2%
Feb-2011 75.1%
Mar-2011 75.3%
Apr-2011 75.1%
May-2011 75.2%
Jun-2011 75.0%
Jul-2011 75.0%
Aug-2011 75.1%
Sep-2011 74.9%
Oct-2011 74.9%
Nov-2011 75.3%
Dec-2011 75.4%
Jan-2012 75.5%
Feb-2012 75.5%
Mar-2012 75.7%
Apr-2012 75.7%
May-2012 75.7%
Jun-2012 75.6%
Jul-2012 75.6%
Aug-2012 75.7%
Sep-2012 76.0%
Oct-2012 76.1%
Nov-2012 75.8%
Dec-2012 76.0%
Jan-2013 75.6%
Feb-2013 75.8%
Mar-2013 75.8%
Apr-2013 75.8%
May-2013 76.0%
Jun-2013 75.9%
Jul-2013 76.0%
Aug-2013 76.0%
Sep-2013 76.0%
Oct-2013 75.6%
Nov-2013 76.1%
Dec-2013 76.1%
Jan-2014 76.4%
Feb-2014 76.4%
Mar-2014 76.5%
Apr-2014 76.5%
May-2014 76.4%
Jun-2014 76.9%
Jul-2014 76.7%
Aug-2014 76.9%
Sep-2014 76.8%
Oct-2014 76.9%
Nov-2014 76.9%
Dec-2014 77.1%
Jan-2015 77.1%
Feb-2015 77.2%
Mar-2015 77.1%
Apr-2015 77.2%
May-2015 77.2%
Jun-2015 77.4%
Jul-2015 77.1%
Aug-2015 77.3%
Sep-2015 77.2%
Oct-2015 77.2%
Nov-2015 77.4%
Dec-2015 77.4%
Jan-2016 77.7%
Feb-2016 77.8%
Mar-2016 77.9%
Apr-2016 77.8%
May-2016 77.9%
Jun-2016 77.9%
Jul-2016 78.0%
Aug-2016 77.9%
Sep-2016 78.0%
Oct-2016 78.1%
Nov-2016 78.1%
Dec-2016 78.1%
Jan-2017 78.2%
Feb-2017 78.3%
Mar-2017 78.5%
Apr-2017 78.6%
May-2017 78.5%
Jun-2017 78.6%
Jul-2017 78.8%
Aug-2017 78.4%
Sep-2017 79.0%
Oct-2017 78.7%
Nov-2017 78.9%
Dec-2017 79.0%
Jan-2018 78.9%
Feb-2018 79.3%
Mar-2018 79.2%
Apr-2018 79.2%
May-2018 79.3%
Jun-2018 79.4%
Jul-2018 79.6%
Aug-2018 79.3%
Sep-2018 79.4%
Oct-2018 79.6%
Nov-2018 79.6%
Dec-2018 79.5%
Jan-2019 79.8%
Feb-2019 79.9%
Mar-2019 79.8%
Apr-2019 79.7%
May-2019 79.7%
Jun-2019 79.7%
Jul-2019 79.6%
Aug-2019 80.0%
Sep-2019 80.2%
Oct-2019 80.3%
Nov-2019 80.3%
Dec-2019 80.4%
Jan-2020 80.6%
Feb-2020 80.5%
Mar-2020 79.5%
Apr-2020 69.6%
May-2020 71.4%
Jun-2020 73.5%
Jul-2020 73.8%
Aug-2020 75.2%
Sep-2020 75.1%
Oct-2020 76.1%
Nov-2020 76.0%
Dec-2020 76.3%
Jan-2021 76.4%
Feb-2021 76.6%
Mar-2021 76.8%
Apr-2021 76.9%
May-2021 77.1%
Jun-2021 77.2%
Jul-2021 77.8%
Aug-2021 77.9%
Sep-2021 78.0%
Oct-2021 78.4%
Nov-2021 78.9%
Dec-2021 79.2%
Jan-2022 79.2%
Feb-2022 79.5%
Mar-2022 80.0%
Apr-2022 79.9%
May-2022 80.0%
Jun-2022 79.8%
Jul-2022 79.9%
Aug-2022 80.2%
Sep-2022 80.2%
Oct-2022 79.9%
Nov-2022 79.8%
Dec-2022 80.1%
Jan-2023 80.3%
Feb-2023 80.5%
Mar-2023 80.7%
Apr-2023 80.7%
May-2023 80.7%
Jun-2023 80.9%
Jul-2023 80.9% 
Aug-2023 80.8%
Sep-2023 80.8%
Oct-2023 80.6%
Nov-2023 80.7%
Dec-2023 80.4%
Jan-2024 80.6%
Feb-2024 80.7%
Mar-2024 80.7%
Apr-2024 80.8%
May-2024 80.8%
Jun-2024 80.8%
Jul-2024 80.9%
Aug-2024 80.9%
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Source: EPI analysis of Bureau of Labor Statistics’ Current Population Survey public data. 

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Real wages are higher, especially for lower-wage workers

It’s not only that more workers have jobs. On average, wages in those jobs are up: Year-over-year wages have been rising faster than inflation for 16 months in a row as inflation has dramatically fallen from its peak in 2022.

Real (inflation-adjusted) wages are up across the wage distribution when compared with 2019, as shown in Figure B. Wage growth was strongest for lower-wage workers, increasing a whopping 16.8%. Even at the middle, workers’ real wages are 6.5% higher now than in 2019. Growth at the higher end isn’t anything to sneeze at, but the fact that it’s faster at lower parts of the wage distribution means that we’ve seen a compression in wages at least among the bottom 90% of the workforce, meaning a reduction in inequality. It’s worth noting that many more-affluent workers have also received the benefit of greater flexibility about where they work over the past four years. The value of this flexibility is likely immense—and it would not have happened without the strong labor market over this period.

Figure B also compares this strong wage growth with the slow and prolonged recovery from the Great Recession, a time when the policy response was far from adequate and the pursuit of austerity meant years more pain for workers and their families. We can see the difference in wage growth, as low- and middle-wage workers experienced a fall in purchasing power, while even high-wage workers experienced slower growth than this time around. The vast majority of workers were worse off, and inequality grew. In short, the current labor market recovery has been faster and fairer.

Figure B

Wage growth is much stronger and more equal compared with the Great Recession recovery: Real wage growth across the wage distribution, 2007–2012 and 2019–2024

2007–2012 2019–2024
Low-wage -3.9% 16.8%
Median -2.7% 6.5%
High-wage 2.8% 4.9%
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Note: 2019 represents calendar year 2019 while 2024 represents the 12 months ending in August 2024.

Source: EPI analysis of the Current Population Survey Outgoing Rotation Group microdata, EPI Current Population Survey Extracts, Version 1.0.56 (2024), https://microdata.epi.org.

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Strong real wage growth, particularly for historically disadvantaged groups

Figure C shows how median wage growth was strong for every demographic group between 2019 and 2024, but particularly for Black men, Hispanic women, and young workers right out of high school. Median Black worker wages grew 7.2%, with Black men experiencing growth of 7.7%. Hispanic and Black women also had especially strong wage growth of 6.6% and 6.2%, respectively. It is only in the tightest of labor markets that historically disadvantaged groups experience improvements in jobs and faster wage growth. That said, even inflation-adjusted wages of middle-wage white men grew 2.4% since 2019, increasing their standard of living.

Young workers right out of high school experienced the fastest wage growth (8.3%) of any group. These workers are often left out in weaker labor markets and also lost their jobs in great numbers when the pandemic recession hit because of the types of jobs they tend to have.

Figure C

Historically disadvantaged groups have seen particularly strong wage growth: Real wage growth for select demographic groups, 2019–2024

Demographic Real Median Wage Growth
Overall 6.5%
Black 7.2%
Hispanic 4.8%
White 4.9%
Black women 6.2%
Hispanic women 6.6%
White women  3.9%
Black men 7.7%
Hispanic men  5.5%
White men  2.4%
Entry level college 4.5%
Entry level high school  8.3%
ChartData Download data

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

Note: 2019 represents calendar year 2019 while 2024 represents the 12 months ending in August 2024. Entry level college and high school wages are averages, not median. Entry-level high school graduates are ages 17–20. Entry-level college graduates are ages 21–24.

Source: EPI analysis of the Current Population Survey Outgoing Rotation Group microdata, EPI Current Population Survey Extracts, Version 1.0.56 (2024), https://microdata.epi.org.

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Slowing job growth doesn’t mean the labor market isn’t still strong

The labor market continues to add jobs, though at a slower pace. But there isn’t reason to worry at this point: As the economy continues to approach full employment, job growth will tend to slow because the pool of sidelined workers dwindles. Hiring and quitting have also come down over the last few months as workers are staying put instead of moving in and out of jobs at the pace they did two years ago. Now that the Federal Reserve has started lowering interest rates, I’m hopeful that any signs of weakness will recede, and the labor market will continue with strength.