Wage Inequality Continues To Rise As Racial And Gender Disparities Persist

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Above Photo: KELSEY C/Flickr

2019 data reveal slow, uneven, and unequal wage growth over the last 40 years

Wage growth was strongest for the highest-wage workers while median hourly wages grew just 1.0% last year, according to a new EPI report. State of Working America Wages 2019 details the most recent hourly wage trends through 2019, showing that large gaps by gender, race, wage, and education level remain—and some of these gaps are increasing.

“Rising wage inequality and slow and uneven hourly wage growth for the vast majority of workers have been defining features of the U.S. labor market for the last four decades, despite steady productivity growth,” said EPI Senior Economist Elise Gould, who authored the report. “But these alarming trends are not inevitable—they are a direct result of a series of policy decisions that have reduced the economic power of most workers to achieve faster wage growth.”

Other key findings in State of Working America Wages 2019, an annual look at wage trends that is part of EPI’s State of Working America series, include:

  • Most workers experienced consistent positive wage growth in only 10 of the last 40 years: in the tight labor market of the late 1990s and in the last five years, when the unemployment rate hit its lowest points in 50 years.
  • Wages for the bottom 50% of college graduates are lower today than they were in 2000.
  • Wage growth for low-wage workers in states with minimum wage increases was much faster than in states without minimum wage increases between 2018 and 2019. The 10th-percentile wage rose by 4.1% in states with minimum wage increases, compared to just 0.9% growth in states without minimum wage increases.
  • In 2019, black wages exceeded their 2000 and 2007 levels across the wage distribution for the first time in this recovery. But black–white wage gaps remain significantly wider now (14.9%) than in 2000 (10.2%), with wages growing faster for white and Hispanic workers than for black workers.
  • The gender wage gap continued to shrink over the last year, with a typical woman paid 85 cents on the typical man’s dollar in 2019.
  • And more education doesn’t close the gender wage gap. Even though they have higher levels of educational attainment, women with an advanced degree are paid, on average, less than men with a college degree.

“Wage growth for low- and middle-wage workers continues to be slower than would be expected in an economy with relatively low unemployment,” said Gould. “Given this sluggish wage growth, policymakers should not presume that the economy has already achieved full employment. Instead, policymakers should take steps to foster strong wage growth, such as raising the federal minimum wage, addressing pay disparities, and protecting and strengthening workers’ rights to bargain collectively for higher wages and benefits.”

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. It is compiled from EPI analysis of government data sources and can be used to analyze wages, inequality, and other economic indicators over time and among demographic groups.