An article today in the New York Times titled “Real Wages Fail to Match a Rise in Productivity†takes a look at how wages have risen, or more to the point failed to rise, during the most recent economic expansion. At a time when productivity (the monetary value of an hour of labor) has risen dramatically, increasing corporate profits, employee wages are basically falling. If you include benefits such as health insurance, they are rising – but nowhere near as fast as productivity.
The most compelling paragraph in my opinion:
Average family income, adjusted for inflation, has continued to advance at a good clip, a fact Mr. Bush has cited when speaking about the economy. But these gains are a result mainly of increases at the top of the income spectrum that pull up the overall numbers. Even for workers at the 90th percentile of earners — making about $80,000 a year — inflation has outpaced their pay increases over the last three years, according to the Labor Department.
Think about it. If the average wage is rising, but the wages for the bottom 90+% of workers are decreasing, then that top earners are doing quite well for themselves. But even looking at the 90th percentile doesn’t fully explain what’s going on. Wage increases are similarly skewed within the top 10% with the top 1% having dramatically higher wage increases than do the 90th to 99th percentiles.