Rising wage inequality has been a defining feature of the American economy for nearly four?decades. In 2017, with an improving economy, all deciles in the overall wage distribution have improved, meaning most workers finally have higher hourly wages now than in 2007, the labor market peak before the Great Recession hit. However, large gaps by gender, race, and wage level remain, and some of these gaps are increasing.
Gradually raising the minimum wage to $15 by 2024 would?directly lift the wages of 22.5 million workers and directly or indirectly lift wages for 41.5 million workers, nearly 30 percent of all U.S. workers.?The workers who would receive a pay increase are overwhelmingly adult workers, most of whom work full time in regular jobs, often to support a family.
Higher hourly wages for low- and middle-wage workers, achievable through a variety of labor-market policies, would unambiguously generate savings in government safety-net and income-support programs—savings that could be used to strengthen and expand anti-poverty programs or make critical public investments to boost productivity and grow the economy.
Closing the gender wage gap is absolutely essential to helping women achieve economic security. But to bring genuine economic security to American women and their families, we must also reverse the decades-long trend of stagnant wages for the vast majority of workers.
The data series and methods we use to construct our graph of the growing gap between productivity and typical worker pay best capture how income generated in an average hour of work in the U.S. economy has not trickled down to raise hourly pay for typical workers.
The Raising America’s Pay?launch report makes the case that broad-based wage growth is the key to reversing the rise of income inequality, enhancing social mobility, reducing poverty, boosting middle-class incomes, and aiding asset-building and retirement security.
Wage stagnation is not inevitable. It is the direct result of public policy choices on behalf of those with the most power and wealth that have suppressed wage growth for the vast majority in recent decades. Thus, because wage stagnation was caused by policy, it can be alleviated by policy.
Wage suppression is the result of intentional policy choices, and it can be reversed by changing policy. To raise Americans’ wages, policymakers must tilt bargaining power back to workers. Here’s how.
The huge gap between rising incomes at the top and stagnating pay for the rest of us shows that workers are no longer benefiting from their rising productivity. Before 1979, worker pay and productivity grew in tandem. But since 1979, productivity has grown eight times faster than typical worker pay (hourly compensation of production/nonsupervisory workers).
Today, the gap between American workers’ productivity and their wages is at an all-time high. EPI’s “potential wages” calculator shows you what you’d be making if wages had grown with productivity.