{"id":9867,"date":"2020-02-24T09:31:04","date_gmt":"2020-02-24T15:31:04","guid":{"rendered":"http:\/\/blog.uwsp.edu\/cps\/?p=9867"},"modified":"2020-03-10T16:57:01","modified_gmt":"2020-03-10T21:57:01","slug":"real-wage-growth-or-lack-thereof-part-1-the-last-decade","status":"publish","type":"post","link":"https:\/\/blog.uwsp.edu\/cps\/2020\/02\/24\/real-wage-growth-or-lack-thereof-part-1-the-last-decade\/","title":{"rendered":"Real Wage Growth (or Lack Thereof): Part 1 \u2013 The Last Decade"},"content":{"rendered":"\n

This blog\nwill take a look at real wage growth in the United States and look at real wage\ngrowth from a variety of perspectives and different time frames. Real wage\ngrowth adjusts the nominal (actual) wage growth for inflation. In other words,\nit measures the purchasing power change in wages. Generally, it\u2019s one of those\ntopics that is interesting to most people – because real wage growth (or lack\nthereof) pretty much affects every worker\u2019s standard of living. The U.S. is\ncurrently experiencing the longest economic expansion in its history and\nunemployment is at a 50-year low \u2013 what about wages?<\/p>\n\n\n\n

In January 2020 the U.S. Bureau of Labor Statistics released data on the 12-month percentage change in average hours worked and real average hourly and weekly earnings for the past 10 years. Six different categories of data are available. Chart 1 below shows the 12-month percentage change for three selected categories: 1) average real hourly earnings of all employees (on private nonfarm payrolls), 2) average weekly hours of all employees, and 3) average real weekly earnings of all employees.<\/p>\n\n\n\n

CHART 1<\/strong><\/p>\n\n\n\n

\"Chart<\/a>
Source: U.S. Bureau of Labor Statistics Real Wage Change<\/a><\/figcaption><\/figure>\n\n\n\n

Over the past decade,\nthe highest percentage 12-month change in average real hourly earnings for all\nemployees occurred in 2015. After declining following the financial and\neconomic crisis of 2007 \u2013 2009, the 12-month change in average hourly earnings\ngradually increased and peaked at over 2% in 2015. The 12-month percentage\nchange slowed in 2016 and growth was less than 1% in 2017. Real hourly earnings\ngrowth increased to nearly 2% in February 2019 before hitting a 2019 low of\n0.6% in December 2019.<\/p>\n\n\n\n

Average weekly hours worked\nby all employees was up and down over the past decade. Following the financial\nand economic crisis, hours worked generally increased through late 2015.\nHowever, declines occurred in 2016 and 2017 before increasing again in 2018.\nDeclines in average weekly hours occurred consistently in 2019 beginning in\nJanuary. <\/p>\n\n\n\n

The change in average\nweekly hours worked combined with changes in average real hourly earnings\ndetermines the change in real average weekly<\/em> earnings. From November\n2012 through December 2016 real average weekly earnings consistently grew, with\ngrowth peaking at 3.0% on February 2015. Real average weekly earnings declined\nJanuary through March of 2017, before increasing throughout 2018 and 2019 and\npeaking at 1.9% in January 2019. The decline in average weekly hours can offset\nthe gains of wage growth. Real average hourly earnings for all employees\nincreased 0.6 percent from December 2018 to December 2019. The change in real\naverage hourly earnings combined with a 0.6-percent decrease in the average\nworkweek resulted in essentially no change in real average weekly earnings over\nthis period.<\/p>\n\n\n\n

In sum, the\n12-month change in average real hourly earnings has consistently increased\nsince 2013. The increases have generally been less than 2%, peaking at 2.4% in\nOctober 2015. In 2019, the 12-month change in average real hourly earnings\npeaked at 1.9% in February. The increase in growth has declined since August,\nfalling to an increase of 0.6% in December. Factoring in changes in average\nweekly hours worked yields the change in real average weekly<\/em> earnings.\nReal average weekly earnings have generally increased since 2014, with growth\npeaking at 3.0% in February 2015. A brief period of declining weekly earnings\noccurred in January and February 2017 before a return to growth. In 2019, the\n12-month change in average real average weekly earnings was essentially no\nchange, the low for the year as a slight decline in the average workweek offset\na slight gain in real average hourly earnings.<\/p>\n\n\n\n

That\u2019s the overall picture for wage and earnings growth over the past decade. The next parts of this blog will break down the long-term numbers for real wage growth by various demographics and income percentiles across different time periods. That will provide some insight as to who saw real wage growth \u2013 and who didn\u2019t.<\/p>\n\n\n\n

CBEI Blog Series:<\/strong><\/em> Real Wage Growth (or Lack Thereof) <\/em><\/strong>
Part 1: The Last Decade<\/a>
Part 2: The Long Run: 1979-2018<\/a>
Part 3: By Decade<\/a>
Part 4: Economic Growth, Unemployment and Wage Growth<\/p>\n\n\n\n

\"Kevin<\/figure>
\n

Kevin Bahr is a professor emeritus of finance and chief analyst of the Center for Business and Economic Insight<\/a> in the Sentry School of Business and Economics at the University of Wisconsin-Stevens Point. <\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

This blog will take a look at real wage growth in the United States and look at real wage growth from a variety of perspectives and different time frames. Real wage growth adjusts the nominal (actual) wage growth for inflation. In other words, it measures the purchasing power change in wages. Generally, it\u2019s one of […]<\/p>\n","protected":false},"author":136,"featured_media":9757,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,527],"tags":[343,344],"_links":{"self":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/9867"}],"collection":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/users\/136"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/comments?post=9867"}],"version-history":[{"count":5,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/9867\/revisions"}],"predecessor-version":[{"id":9952,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/9867\/revisions\/9952"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/media\/9757"}],"wp:attachment":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/media?parent=9867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/categories?post=9867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/tags?post=9867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}