Low- and middle-wage workers’ wages grow more quickly in response to an improving labor market than high-wage workers’ wages: Change in average annual real wage growth in response to a 1-percentage-point increase in unemployment or employment rates over the 1980–2016 period, by wage percentile
| 10th-percentile wage | 50th-percentile wage | 90th-percentile wage | |
|---|---|---|---|
| Unemployment rate | -0.49002 | -0.41468 | -0.29154 |
| EPOP, ages 16+ | 0.226744 | 0.190327 | 0.09891 |
| Prime-age EPOP | 0.246173 | 0.212029 | 0.091589 |
Notes: Each bar is the coefficient from the regression of the real annual percent change in a given percentile’s wage on the measure of labor market tightness. Regressions include state and year fixed effects. Additional details and estimates are in the appendix. EPOP refers to the employment-to-population ratio; prime-age refers to adults ages 25–54. The xth-percentile wage is the wage at which x% of wage earners earn less and (100−x)% earn more.
Source: EPI analysis of annual, state-level aggregations of Current Population Survey Outgoing Rotation Group microdata, 1979–2016