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Wages for workers at every pay level except the bottom 10 percent declined from the second half of 2013 through the second half of 2014, according to a report from the Economic Policy Institute released Wednesday. Furthermore, there’s no sign of wage acceleration that might prompt the Federal Reserve to raise interest rates.
For 70 percent of the workforce, inflation-adjusted hourly wages are still lower than they were in 2007, and wages for all groups are lower than they were at the end of the recession in 2009.
This year’s trend isn’t new. Overall median hourly wages rose 6.1 percent over the entire 1979 and 2013 period, but for those in the bottom 10 percent of the income scale, hourly pay fell 5.3 percent over that time. Meanwhile, the richest 5 percent of Americans experienced hourly pay growth of 40.6 percent. The late 1990s were the only period when wage growth was broad-based, and even strongest for the lowest-income earners.
US News and World Report August 28, 2014 -
Inflation-adjusted wages have fallen for every income group in the past year except very low-paid workers, says an Economic Policy Institute study out Wednesday.
The report casts doubt on the perception that more educated, highly skilled employees are experiencing sharper-than-average pay increases and that low-paid workers are stuck in the deepest earnings rut.
Median U.S. hourly wages in the first half of 2014 were $16.59, down 0.9% the past year after figuring inflation, the study says.
But pay was also lower for other income groups, including a 0.7% drop for workers at the 95th wage percentile who earn $52.23 an hour — meaning they make more than 95% of workers and less than 5%.
USA Today August 28, 2014 -
Wage growth for most workers remains stagnant and will need to pick up pace for the economy to hit full recovery mode, a new report said on Wednesday.
During the first half of 2014 year inflation-adjusted hourly wages fell for the majority of workers, even for those with a bachelor’s or advanced degrees, compared with the same period in 2013, according to a new study from the Economic Policy Institute’s Raising America’s Pay initiative.
The wage stagnation is evidence that the economy is far from full employment and shows that the Federal Reserve should not consider raising interest rates, the report said.
“Despite a recovering economy and growing productivity, employers are not putting anything more in their employees’ paychecks,” said report author EPI economist Elise Gould.
The Hill August 28, 2014 -
By now, anyone following the debate over income inequality in the U.S. has likely seen the rise of income inequality charted over the years or over decades. But how about income inequality hour by hour?
A new study by the Economic Policy Institute, a left-leaning think tank, breaks down Labor Department data on hourly earnings to show income disparity even at the level of hourly wages. Someone earning $8.38 an hour is in the 10th percentile, meaning they earn more than 10% of workers, but less than 90%. At the 50th percentile, workers have been earning $16.59. At the top of the distribution, workers at the 90th percentile earn $40 an hour and those at the 95th percentile earn $52.23.
And since the recession began, wages have only been growing (and even then only modestly) for those at the top, according to the analysis by EPI economist Elise Gould.
Wall Street Journal August 28, 2014 -
Real hourly wages declined for almost every segment of the U.S. workforce in the first half of 2014, according to a briefing paper released Wednesday morning by the Economic Policy Institute, a liberal think tank.
“The last year has been a poor one for American workers’ wages,” economist Elise Gould, who directs EPI’s health policy research, writes in the report. Analyzing data from the government’s Current Population Survey, Gould found that workers at the 20th, 30th, 40th, 50th, 60th, 70th, 80th, 90th, and 95th percentiles all experienced declines (ranging from 0.5 percent to 2.0 percent) in their real wages in the first half of 2014 compared with the same period last year. Real wages declined among workers with no high school degree (0.6 percent), with just a high school degree (1.1 percent), with some college (1.0 percent), with a college degree (1.6 percent), and with an advanced degree, too (2.7 percent).
Bloomberg BusinessWeek August 28, 2014 -
Consumer spending accounts for more than two-thirds of the economy, and although businesses have added more than 200,000 jobs a month for the past six months, incomes have remained stagnant.
“Many consumers still have very tight budgets,” says Jack Kleinhenz, chief economist at the National Retail Federation. “Wages haven’t increased as fast as we would like them to. At that end, it puts more pressure on them for making purchases and certainly it’s expected that they’re going to trade off purchases from time to time.”
Kleinhenz says cheaper prices at the pump could start freeing up spending power for Americans with cars. At $3.45 a gallon, the national average price of gas on Monday was the cheapest it’s been since February and was the lowest August price since 2010, according to AAA.
“You could definitely say the desire to find the cheapest prices possible is a coping mechanism people use when economic times are tough, and they certainly have been for most Americans, let alone those at the bottom half of the wage distribution and labor market,” says Josh Bivens, research and policy director at the Economic Policy Institute.
US News and World Report August 22, 2014 -
Fed Chair Janet Yellen will deliver the keynote address at an annual economic symposium in Jackson Hole, Wyoming, this week at a gathering of central bankers and academics that will focus on labor markets. All attendees, which include central bankers, academics and the media, pay their own entrance fee of $1,000 as well as their own travel costs to attend.
Including the rather exclusive Jackson Hole summit, many worry there isn’t enough access for “everyday” Americans to share their stories to policymakers as they make monetary policy decisions.
“Low-wage and middle-income working folks don’t necessarily understand what the Fed does, and even people who are unemployed and underemployed have other pressing concerns,” says Peter Brownell, research director at the Center on Policy Initiatives. “Efforts need to be made to actually affirmatively reach out to people and get their perspective, whereas Wall Street and business leaders are not shy about putting their views forward.”
Brownell’s organization is one of about 60 – including the Economic Policy Institute and the National Employment Law Project – that cosigned a letter to Fed policymakers saying that the job market remains weak enough – particularly in light of the flat wages for hourly workers – to necessitate its easy-money policies.
US News and World Report August 22, 2014 -
Josh Smith, The Economic Policy Institute, and Jim Pethokoukis, The American Enterprise Institute, discuss why tax inversions are receiving so much attention.
NBC News August 20, 2014 -
Hourly wages for most Americans either stagnated or declined from 2000 to 2013, the Economic Policy Institute, a liberal-leaning think tank, said in a June report. Like the National Employment Law Project, the EPI found that the worst-hit groups were those at the lowest of the wage distribution.
CBS Moneywatch August 20, 2014 -
It doesn’t take a rocket scientist to figure out why some people are saying yes to silence: many of us are starved for quiet time, thanks to our increasingly hectic lives. According to a 2013 report by the Economic Policy Institute, the average American worker works 181 more hours in a year than he did in 1979, which represents a nearly 11% increase in work hours over roughly 30 years. That’s the equivalent of every worker working an additional 4.5 weeks per year.
Wall Street Journal August 20, 2014