[quote=utcsox][quote=CA renter][quote=SK in CV][quote=poorgradstudent]Looks like unemployment is finally starting to catch up in what has been a largely jobless recovery.
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Largely jobless? Something like 12 million private sector jobs in the last 5 years, and more than 5.5 million in the last 2 years is jobless?[/quote]
But most of those new jobs are in lower-paying sectors than the ones that disappeared during the recession. It probably feels pretty “jobless” when people are making around half of what they were making just a few years ago. We know a few people who are literally making that much less![/quote]
From the from the BLS: “In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $24.75, following a decrease of 5 cents in December. Over the year, average hourly earnings have risen by 2.2 percent.” With CPI that is under 2%, there has been some real wage growth.
Persons working part time for economic reasons and long term unemployed (> 26 weeks) are still much higher than historical data. However; they are both trending down rapidly. We might see some real wage growth in 2015 if the recovery continue.[/quote]
Yes, and it’s good to finally see that after ~5 years of rising prices and stagnant/declining wages. We still have a long, long way to go before workers’ wages catch up to their purchasing power from years ago.
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But after adjusting for inflation, today’s average hourly wage has just about the same purchasing power as it did in 1979, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.
A similar measure, “usual weekly earnings” of employed, full-time, wage and salary workers, tells much the same story, albeit over a shorter time period. In seasonally adjusted current dollars, median usual weekly earnings rose from $232 in the first quarter 0f 1979 (when the series began) to $782 in the second quarter of this year (the most recent data available). But in real terms, the median has barely budged over that period.
What gains have been made, have gone to the upper income brackets. Since 2000, usual weekly wages have fallen 3.7% (in real terms) among workers in the lowest tenth of the earnings distribution, and 3% among the lowest quarter. But among people near the top of the distribution, real wages have risen 9.7%.
