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Pay is up $32 for the very poorest

You've probably heard that wages have lately been going up faster for the poor than for the affluent. It's true:

Don't make too much of this, however. As you can see, nearly everyone is within about 1% of their pre-pandemic wages. The only exception is the very poorest, who are up 6%. But it's worth keeping in mind that this amounts to an increase of $32 per week over four years. It's better than nothing, but hardly enough to get excited about.

18 thoughts on “Pay is up $32 for the very poorest

  1. bbleh

    ... hardly enough to get excited about.

    And yet, the politicians and media aligned with the wealthy seem very excited indeed about it. Wage inflation! Labor shortages! Unions!

    How that possibly could be is a puzzlement indeed.

  2. reino2

    Wages going up $1600 per year for poor people over four years is good news. Would it have to hit $5000 before it would be a big deal?

  3. skeptonomist

    Real GDP has gone up 5.5% since 4th quarter 2019, so the poorest have actually been keeping up with the country, for a change - not really gaining on this measure. Overall all workers have fallen far behind GDP/capita since 1973 and there is no reason to think that this has suddenly changed. Remember that the lowest-wage workers were the ones who were laid off in the pandemic so many of them were not getting any wages. If the Fed succeeds in engineering another recession, wages may fall behind again - anyway unemployment will go up so that workers as a group will be losers. According to the measure of wages and salaries that Kevin shows, the gains in GDP have mostly gone to the 10th decile, probably the 1% especially.

    But most importantly, wage gains for the poorest and for all wage-earners in no way justify the claims, made by some self-described liberal economists, the media and the Fed, that if wages aren't kept down inflation will eat us all up. Wage gains didn't cause inflation and they are no threat to do so now.

  4. Crissa

    After four year, not over four years. Over four years would mean 32 the first week, 64 the second week, 96 the third week...

  5. jdubs

    That seems like a pretty big deal.

    $32/week might not mean much to you, but its certainly a big deal if you're making $550/week.

    1. golack

      It's average of incomes, so those not working not counted. If people are fired and those remaining have to work more hours, income average goes up as would unemployment.

      1. jdubs

        This makes it even more impressive as this statsistic doesnt consider the large jump from $0 income to 1st decile income.

        We are living in the best labor market in most workers lifetimes....but that isnt an interesting story so it is rarely told.

              1. jdubs

                To you? Or to the people affected?

                Its clearly the first, but you appear to be trying to hide behind the second. Its okay to just say you dont care about the income improvements that those people have gained. Throwing random, uninformed reasons at the wall to dismiss it is kind of silly.

  6. skeptonomist

    Is the bottom decile the same people as it was in 2019? In the first quarter of 2020 many of the people at the bottom of the wage scale were laid off, according to the usual story. This caused the boundaries of the deciles to move upward, so that the average for all deciles increased, presumably despite few individuals actually receiving raises, although there were bonuses for some workers. That is, some people who were formerly in higher deciles were then classified in the bottom decile (for example), although they were receiving the same wages. Or is this wrong and did all 2019 deciles get raises?

    Have all such compositional effects now been erased? I don't know, but these comparisons of wages can be tricky. As Kevin has pointed out before, different surveys by the BLS can give apparently different numbers.

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