From the early 1970s to 1995 wages were stagnant overall and median wages fell. After 1995 wages rose in response to low unemployment and faster economic growth. Wage inequality grew significantly during the 80s and 90s, especially with respect to the gap between top earners and middle and low wage workers. The following chart shows wage trends for the 80% of workers who are production and non-supervisory workers. This includes factory workers, construction workers, and a wide variety of service-sector workers ranging from clerical workers to nurses and teachers. It does not include managers and supervisors. Note that compensation grew much faster than wages in the 70s. Hourly wage and compensation growth for production/non-supervisory workers, 1959-2001 Source: The State of Working America 2002/2003 by Mishel, Bernstein, and Boushey, p. 124 The following table shows the wage rate changes for all workers divided into their relative position on the wage scale. Note the last line, which shows a dramatic difference in wage growth between workers in low wage and high wage jobs. Wages for all workers by wage percentile (2001 dollars) Wage by percentile 10 20 30 40 50 60 70 80 90 95 Hourly wage 1979 $6.68 7.61 8.94 10.52 11.89 13.79 16.30 19.00 23.24 28.38 2001 $6.69 8.07 9.63 11.03 12.87 15.06 17.94 21.71 28.97 36.56 Percent Change 1979-2001 0.2% 6.0 7.7 4.9 8.2 9.2 I0.0 14.3 24.7 28.8 Source: The State of Working America 2002/2003 by Mishel, Bernstein, and Boushey.
From the early 1970s to 1995 wages were stagnant overall and median wages fell. After 1995 wages rose in response to low unemployment and faster economic growth. Wage inequality grew significantly during the 80s and 90s, especially with respect to the gap between top earners and middle and low wage workers.
The following chart shows wage trends for the 80% of workers who are production and non-supervisory workers. This includes factory workers, construction workers, and a wide variety of service-sector workers ranging from clerical workers to nurses and teachers. It does not include managers and supervisors. Note that compensation grew much faster than wages in the 70s.
Hourly wage and compensation growth for production/non-supervisory workers, 1959-2001
The following table shows the wage rate changes for all workers divided into their relative position on the wage scale. Note the last line, which shows a dramatic difference in wage growth between workers in low wage and high wage jobs.
Wage by percentile
Source: The State of Working America 2002/2003 by Mishel, Bernstein, and Boushey.
No, wages lagged far behind. While productivity increased steadily during the last quarter century, median wages were stagnant or grew very little. In other words, workers did not share fully in the economic gains produced by increases in productivity. This chart gives an overall picture of the trends: Productivity and hourly compensation growth, 1973-2001 Source: The State of Working America 2002/2003 by Mishel, Bernstein, and Boushey.
No, wages lagged far behind. While productivity increased steadily during the last quarter century, median wages were stagnant or grew very little. In other words, workers did not share fully in the economic gains produced by increases in productivity. This chart gives an overall picture of the trends:
Productivity and hourly compensation growth, 1973-2001
Obviously, wages increase with education. However, this "education/wage differential" has increased significantly during the past quarter century. In the following table, note that the wages of workers with college degrees and advanced degrees increased significantly, while the wages of all others were stagnant or declined. Change in real hourly wages for all workers by education, 1973-2001 Less than high school High School Some college College Advanced degree Hourly wage 1973 $11.66 $13.36 $14.39 $19.49 $23.56 1979 11.62 13.04 13.94 18.27 22.31 1989 9.99 12.17 13.67 19.16 24.71 1995 9.04 11.95 13.37 19.84 26.18 2000 9.40 12.65 14.3 22.10 27.9 2001 9.50 12.81 14.60 22.58 28.14 Source: The State of Working America 2002/2003 by Mishel, Bernstein, and Boushey. For a more detailed look at the effect of education on wage trends, see this PDF file.
Obviously, wages increase with education. However, this "education/wage differential" has increased significantly during the past quarter century. In the following table, note that the wages of workers with college degrees and advanced degrees increased significantly, while the wages of all others were stagnant or declined.
Change in real hourly wages for all workers by education, 1973-2001
For a more detailed look at the effect of education on wage trends, see this PDF file.
On average, a white man with a college diploma earned about $65,000 in 2001. Similarly educated black and Hispanic men earned 30 percent less. Differences in wages were slightly lower for other educational levels. The following table shows hourly wage rates at all educational levels for major racial and ethnic groups:
On average, a white man with a college diploma earned about $65,000 in 2001. Similarly educated black and Hispanic men earned 30 percent less. Differences in wages were slightly lower for other educational levels.
The following table shows hourly wage rates at all educational levels for major racial and ethnic groups:
College educated white women earned about 40 percent less than college educated white men in 2001. The following graph shows hourly entry-level wage rates of mail and female high school graduates: Hourly wages 1973-2001 (2001 dollars) For a more detailed look at wage rates for men and women, see this PDF file.
College educated white women earned about 40 percent less than college educated white men in 2001.
The following graph shows hourly entry-level wage rates of mail and female high school graduates:
For a more detailed look at wage rates for men and women, see this PDF file.
The federal minimum wage now stands at $5.15. It was last increased on September 1, 1997.
The value of the minimum wage has not kept up with inflation. When adjusted for inflation, the value of the minimum wage is 21% lower than it was in 1979.
Real Value of Minimum Wage (2000 dollars)
Wage inequality has been increasing, in part, because of the declining real value of the minimum wage. Between 1979 and 1992, the declining real value of the minimum wage contributed 22% of the growth in wage inequality between men at the 90th percentile of the wage scale and men at the 10th percentile of the wage scale and 42% of the growth in wage inequality between women at the 90th percentile of the wage scale and women at the 10th percentile of the wage scale. The following chart demonstrates the minimum wage trend in relationship to the poverty line. Annual minimum wage earnings in 1999 dollars and the poverty level for one-parent, two-child family
Wage inequality has been increasing, in part, because of the declining real value of the minimum wage. Between 1979 and 1992, the declining real value of the minimum wage contributed 22% of the growth in wage inequality between men at the 90th percentile of the wage scale and men at the 10th percentile of the wage scale and 42% of the growth in wage inequality between women at the 90th percentile of the wage scale and women at the 10th percentile of the wage scale.
The following chart demonstrates the minimum wage trend in relationship to the poverty line.
Annual minimum wage earnings in 1999 dollars and the poverty level for one-parent, two-child family
A "living wage" is a term used to refer to a wage that produces an income sufficient to provide for a family's basic needs. These "living wages" are generally much higher than the minimum wage. Living wages also commonly refer to wages set by local ordinances that cover a specific set of workers, usually government workers or workers hired by businesses that have received a government contract or subsidy.
Living costs for a family of 3 in Minnesota (2 adults, 1 child) Metro Greater MN Statewide Food $406 $406 $406 Housing 912 564 757 Health Care 293 293 293 Transport. 344 445 389 Child Care 0 0 0 Clothing/Other 249 249 249 Net Taxes 322 115 225 Monthly Total $2,526 $2,073 $2,319 Annual Total $30,313 $24,873 $27,830 Hourly Wage $14.57 $11.96 $13.38 Living costs for a family of 4 in Minnesota (2 adults, 2 child) Metro Gr MN Statewide Food $509 $509 $509 Housing 1233 730 1009 Health Care 339 339 339 Transport. 344 445 389 Child Care 0 0 0 Clothing/Other 290 290 290 Net Taxes 380 23 308 Monthly Total $3,095 $2,336 $2,845 Annual Total $37,138 $28,036 $34,135 Hourly Wage $17.85 $13.48 $16.41 Source: Jobs Now Coalition
Living costs for a family of 3 in Minnesota (2 adults, 1 child)
Living costs for a family of 4 in Minnesota (2 adults, 2 child)
Source: Jobs Now Coalition
In 2002, the average CEO compensation package equaled $10.83 million according to The New York Times. While pay cuts for the most richly rewarded CEOs reduced the size of the average compensation package, most CEOs actually got pay raises. Median CEO pay increased by 6 percent in 2002—more than twice the growth of workers' paychecks. And while shareholders—including workers who depend on the stock market for their retirement savings and pensions—have lost $7 trillion since the stock market peak, today’s CEO pay packages are roughly equal to their pre-bear market levels.
Median CEO Pay Grew in 2002While Profits, Stocks Declined
Average CEO pay is over 400 times that of the average worker. This gap has grown dramatically during the past two decades, as shown in the chart below: Ratio of average worker pay to average CEO pay Source: Business Week For the top 100 CEO's the disparity is even greater. During the past 30 years, the average real annual compensation of the top 100 C.E.O.'s went from $1.3 million -- 39 times the pay of an average worker -- to $37.5 million, more than 1,000 times the pay of ordinary workers. (Source: Fortune Magazine)
Average CEO pay is over 400 times that of the average worker. This gap has grown dramatically during the past two decades, as shown in the chart below:
For the top 100 CEO's the disparity is even greater. During the past 30 years, the average real annual compensation of the top 100 C.E.O.'s went from $1.3 million -- 39 times the pay of an average worker -- to $37.5 million, more than 1,000 times the pay of ordinary workers. (Source: Fortune Magazine)
