Toro
Diamond Member
Over time, wage growth should reflect productivity growth. However, that has not happened over the past 20 to 30 years.
The sad but true story of wages in America
The one caveat I would note is that wages are one component of compensation. Benefits are the other. I believe that benefits, particularly medical, have increased at a faster rate of productivity growth thus making up at least part of the difference, though I have not confirmed that
• U.S. productivity grew by 62.5% from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12% in the same period. Real hourly compensation grew a bit more (20.5% for state/local workers and 17.9% for private-sector workers) but still lagged far behind productivity growth.
• Wage stagnation has hit high school–educated workers harder than college graduates, although both groups have suffered—and a bit more so in the public sector. For example, from 1989 to 2010, real wages for high school-educated workers in the private sector grew by just 4.8%, compared with 2.6% in state government. During the same period, real wages for college graduates in the private sector grew 19.4%, compared with 9.5% in state government.
• The typical worker has had stagnating wages for a long time, despite enjoying some wage growth during the economic recovery of the late 1990s. While productivity grew 80% between 1979 and 2009, the hourly wage of the median worker grew by only 10.1%, with all of this wage growth occurring from 1996 to 2002, reflecting the strong economic recovery of the late 1990s.
• The fading momentum of the 1990s recovery failed to propel real wage gains for college graduates employed by private-sector firms or states from 2002 to 2010, despite productivity growth of 20.2% over the same period.
The sad but true story of wages in America
The one caveat I would note is that wages are one component of compensation. Benefits are the other. I believe that benefits, particularly medical, have increased at a faster rate of productivity growth thus making up at least part of the difference, though I have not confirmed that
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