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Thirteen Facts about Wage Growth

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Thirteen Facts about Wage Growth

The Hamilton Project,

5 min read
5 take-aways
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What's inside?

Why have pay increases lagged substantially in the United States?

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Editorial Rating

8

Qualities

  • Analytical
  • Overview
  • Engaging

Recommendation

While some observers are quick to blame trends like globalization and technology for stagnating wage growth in the United States, it turns out that there is much more to this story. Policy professionals at the Brookings Institution’s Hamilton Project look into what’s behind this phenomenon and offer a comprehensive and well-presented narrative on this issue, while also including some policy suggestions on how to combat sluggish pay growth. getAbstract recommends this succinct and accessible summary to policy experts, employers and employees.

Summary

From 1973 to 2017, American workers’ real wages increased by less than 0.2% per year, on average. Thirteen factors account for the slowing of pay increases in the United States:

  1. The part of US output that goes to workers declined from 64.5% in 1974 to 56.8% in 2017, due to advances in technology and companies’ offshoring and consolidation.
  2. Pay for staff in the middle and at the bottom of the income scale has languished.
  3. In 1979, employers paid those with bachelor’s degrees 134% of the wages paid to those with only high school diplomas; by 2016, the...

About the Authors

Jay Shambaugh et al. are policy professionals with the Brookings Institution’s Hamilton Project.

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