Inequality explains 70% of the pay–productivity gap: Growth of productivity, real average compensation (consumer and producer), and real median compensation, 1973–2014
| Year | Median hourly compensation | Consumer avg. hourly compensation | Net productivity | Producer avg. hourly compensation |
|---|---|---|---|---|
| 1973 | 0.0% | 0.0% | 0.0% | 0.0% |
| 1974 | -2.0% | -0.9% | -1.6% | 0.1% |
| 1975 | -0.5% | 1.0% | 0.6% | 1.2% |
| 1976 | 0.4% | 2.8% | 3.4% | 3.1% |
| 1977 | 1.3% | 3.9% | 4.6% | 4.5% |
| 1978 | 2.5% | 5.0% | 5.6% | 5.4% |
| 1979 | 1.9% | 4.9% | 5.8% | 6.6% |
| 1980 | 1.1% | 4.1% | 5.0% | 7.9% |
| 1981 | -1.2% | 4.5% | 7.2% | 8.6% |
| 1982 | 0.5% | 5.6% | 5.7% | 9.7% |
| 1983 | 0.4% | 5.8% | 8.8% | 10.0% |
| 1984 | 0.7% | 6.0% | 11.7% | 10.8% |
| 1985 | 1.7% | 7.7% | 13.6% | 12.6% |
| 1986 | 3.8% | 11.2% | 15.9% | 16.3% |
| 1987 | 3.4% | 11.9% | 16.5% | 18.1% |
| 1988 | 2.7% | 13.3% | 17.8% | 19.9% |
| 1989 | 2.6% | 12.1% | 18.8% | 19.1% |
| 1990 | 2.6% | 13.4% | 20.4% | 21.8% |
| 1991 | 3.6% | 14.6% | 21.4% | 23.4% |
| 1992 | 5.2% | 18.0% | 25.8% | 27.3% |
| 1993 | 4.5% | 17.1% | 26.2% | 26.5% |
| 1994 | 2.4% | 16.3% | 27.4% | 25.7% |
| 1995 | 0.7% | 15.7% | 27.5% | 25.6% |
| 1996 | -0.4% | 17.1% | 30.6% | 28.0% |
| 1997 | 1.4% | 18.4% | 32.4% | 29.8% |
| 1998 | 4.0% | 22.7% | 35.0% | 34.7% |
| 1999 | 7.1% | 25.3% | 38.3% | 38.2% |
| 2000 | 6.8% | 29.1% | 41.6% | 43.8% |
| 2001 | 9.6% | 31.2% | 43.8% | 46.6% |
| 2002 | 11.3% | 32.5% | 47.8% | 47.9% |
| 2003 | 13.3% | 35.1% | 52.6% | 51.1% |
| 2004 | 13.6% | 37.7% | 56.7% | 53.9% |
| 2005 | 12.5% | 37.9% | 59.4% | 54.6% |
| 2006 | 12.3% | 38.7% | 60.4% | 56.1% |
| 2007 | 11.0% | 40.6% | 61.5% | 58.4% |
| 2008 | 11.6% | 39.3% | 61.8% | 59.8% |
| 2009 | 14.0% | 42.1% | 65.1% | 60.9% |
| 2010 | 12.7% | 42.6% | 70.0% | 61.9% |
| 2011 | 9.6% | 41.1% | 70.2% | 61.6% |
| 2012 | 8.5% | 41.6% | 71.1% | 62.4% |
| 2013 | 9.6% | 41.2% | 71.2% | 61.8% |
| 2014 | 8.7% | 42.5% | 72.2% | 63.3% |
Note: Over 1973–2014, over half (58.9 percent) of the growth of the productivity–median compensation gap was due to increased compensation inequality, and about a tenth (11.5 percent) was due to a loss in labor’s income share—meaning that about 70 percent of the gap is attributable to inequality. All compensation data are in real terms. Data are for all workers. Net productivity is the growth of output of goods and services minus depreciation, per hour worked.
Source: Adapted from Figure C in Josh Bivens and Lawrence Mishel, Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay: Why It Matters and Why It’s Real, EPI Briefing Paper #406, September 2, 2015