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News from EPI Wages grew for most workers in 2017, but slowly and unequally

Inflation-adjusted wages rose for most workers in 2017, according to a new analysis by EPI Senior Economist Elise Gould. However, while many workers finally have hourly wages higher than before the Great Recession, large gaps by gender, race, and wage level remain—and some of these gaps are increasing. The State of American Wages 2017 details the most up-to-date hourly wage trends through 2017, showing that, while there have been welcome improvements, wage growth continues to be slower than what we should expect in a stronger economy.

“Rising inequality means that although we are seeing broad-based wage growth, most working people are just making up lost ground rather than getting ahead,” said Gould. “Workers at the top of the wage distribution are getting big raises, while over the last 17 years, low- and moderate-wage workers have only seen small increases in the size of their paychecks.”

Other key findings in The State of American Wages 2017, which is an annual look at wage trends and is part of EPI’s State of Working America series, include:

  • The main measures of wage growth—the Current Population Survey (CPS) and Current Employment Statistics data (CES)—tell a consistent story between 2016 and 2017: hourly nominal wages are slowly improving, but not fast enough.
  • Wage inequality has grown since 2000—on top of the rising inequality we saw since the 1970s. Notably, most men’s wages have barely budged above their 2000 level.
  • State-level minimum wage increases over the last few years are associated with stronger wage growth for low-wage workers.
  • Significant gender wage gaps remain across the wage distribution and by educational attainment. Men with college degrees are paid more on average than women with advanced degrees.
  • Wage growth since 2000 was stronger for white and Hispanic workers than for black workers, many of whom saw outright declines in 2017. The black-white wage gap across the wage distribution and by educational attainment is larger today than it was in 2000.
  • Over the 2000s, higher-educated workers have seen faster wage growth than those with less educational attainment. Workers with “some college” still have lower wages today than in 2000. However, an increasing college wage premium cannot explain the vast increases in wage inequality in the 2000s.

“One bright spot is faster-than-average wage growth for low-wage workers over the last four years,” said Gould. “This suggests that state minimum wage increases and an economy that continues to approach full employment are boosting wages. Policymakers should look to this as an example—raising the federal minimum wage and continuing to push for full employment will have an outsized impact on low-wage workers.”

EPI’s interactive wages calculator, which shows workers what their wages would be if wages had grown alongside productivity, has been updated with 2017 data. EPI’s gender pay gap calculator, which shows what women could be making in a more equal economy, has also been updated with 2017 data. The data in this paper are also available in EPI’s State of Working America Data Library, with newly updated hourly wage series, including by race and gender across the wage distribution, and by education. The data library also includes newly updated regression-adjusted gender and racial wage gaps.