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Date: 2025-02-10 Page is: DBtxt001.php txt00017239 |
Wages | ||
Burgess COMMENTARY Peter Burgess | ||
Labor Day 2019
Wage growth is weak for a tight labor market—and the pace of wage growth is uneven across race and gender
Report • By Elise Gould and Valerie Wilson • August 27, 2019
'../../DBpdfs/Orgs/EPIEPI-wage-growth-USA-17239.pdf
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Part of the series Labor Day 2019: How Well Is the American Economy Working for Working People?
Summary: While unemployment rates in this recovery are similar to what we saw in the late 1990s recovery, wages have not grown nearly as fast or as evenly across race and gender as they did during that period. From 1996 to 2000, wage growth was above 9% for white men, white women, and black women, and was 10.3% for black men. But from 2015 to 2019, it was considerably slower for all groups, with growth slowing the most for black men and black women (to 5.0% and 4.7%). Wage growth gaps are even more dramatic among college graduates. From 2015 to 2019, women college grads saw their wages grow just 3.0%, compared with 7.8% for men, while wages of black college grads fell 0.3% versus 6.6% wage growth for white college grads. In contrast, wage growth for college graduates (like overall wage growth) was strong and even across all groups from 1996 to 2000—with black workers experiencing the strongest growth at 11.5% and other groups not far behind (10.9% for men, 9.8% for women, and 10.6% for white workers).
The Federal Reserve’s decision to lower interest rates by one quarter of one percent at the end of July sends an important message about the current state of the labor market. Nominal wage growth is nowhere near the level at which the Fed is seriously concerned about upward pressure on inflation. The lack of consistently strong wage growth is one of the remaining weaknesses of the labor market; nominal wage growth has stalled in 2019, even though the national unemployment rate has been at or below 4% for more than a year. The last time unemployment fell to 4% and below for an extended period of time—in the late 1990s—wage growth was much stronger across the board, as we describe below.
Wage growth overall is much weaker than it was in the late 1990s
Figure A compares rates of median wage growth over the five-year periods from 1996 to 2000 and 2015 to 2019, by race and gender. This chart shows that during the latter years of the 1990s, median wages grew by more than 9% for all groups shown—black and white men, as well as black and white women. Median wage growth overall was 8.9% from 1996 to 2000 and 5.9% from 2015 to 2019. (The overall numbers include data for racial/ethnic groups not represented in Figure A.)
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| The text being discussed is available at | https://www.epi.org/publication/labor-day-2019-wage-growth-gaps/ and |
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