In stark contrast to prior decades, low-wage workers experienced dramatically fast wage growth between 2019 and 2023—even after accounting for inflation—according to a new Economic Policy Institute report. Real hourly wages for workers in the 10th percentile grew 12.1% over the four-year period, significantly faster than any other period of economic shock in the last 40 years. By comparison, middle-wage workers experienced 3.0% real wage growth, while the 90th-percentile wage grew 0.9% between 2019 and 2023.

Women, Black and Hispanic workers, young workers, and workers with less than college degree saw particularly strong wage growth during this period. This resulted in Black-white and Hispanic-white wage gaps narrowing between 2019 and 2023, a reversal from previous decades.

Large government COVID relief and recovery measures, combined with a tight labor market, gave low-wage workers better job opportunities and leverage to see strong wage growth, the report explains. State minimum wage increases also fueled wage growth: Low-end wages grew about 50% faster in the 29 states (and D.C.) with minimum wage changes between 2019 and 2023 compared with states without any change in their minimum wage.

Nevertheless, low-wage workers continue to suffer from grossly inadequate wages: The 10th-percentile hourly wage in 2023 was $13.52, or $28,120 annually for a full-time worker. This is not enough to attain a modest yet adequate standard of living in any county or metro area in the United States, according to EPI’s Family Budget Calculator.

“The current period of dramatically fast wage growth for low-wage workers wasn’t inevitable or pure luck—it was the result of intentional policy decisions during the pandemic that created today’s tight labor market,” said EPI senior economist Elise Gould. “But low-wage workers are still not paid enough to make ends meet. Policymakers need to strengthen labor standards so that workers can lock in the gains made and continue to build on them, even in weaker labor markets. This should include raising the federal minimum wage, making long-term investments in our unemployment insurance system, and removing obstacles to workers forming unions.”