'Another year of poor wage growth' in 2014

Small increase for low-wage workers driven by recent minimum wage hikes, according to new report on American wages

Percent change in real hourly wages, by wage percentile

The below chart shows how wages have grown or shrunk for each income bracket of U.S. workers. Nearly all workers saw their wages decline slightly between the end of 2013 and the end of 2014, except for the bottom 40th percentile of wage earners.

Source: Economic Policy Institute analysis of Current Population Survey Outgoing Rotation Group microdata.

American wages have stagnated, or even fallen relative to inflation, for decades. A new analysis from the Economic Policy Institute (EPI), a left-leaning think tank, finds that for the vast majority of workers last year was no different.

Workers in nearly every income bracket saw their wages fall from the end of 2013 through 2014, according to a new analysis of Department of Labor data by EPI senior economist Elise Gould. The sharpest drop — 2.2 percent — came among workers with advanced degrees, suggesting that “poor wage performance cannot be blamed on workers lacking adequate education or skills,” Gould wrote in a report on the data.

As the American economy has straggled out of recession, employment has recovered considerably. The most recent jobs report in January suggests that the U.S. economy is on a job creation streak unlike anything seen since the 1990s. The number of Americans filing for unemployment benefits is also at a 15-year low, according to the most recent data. Yet much of the recent job creation has been concentrated in low-wage sectors such as service and retail. Compensation for working Americans does not appear to have rebounded at the same pace as employment.

"Only those at the top of the wage distribution have real wages higher today than before the recession began," Gould wrote.

Nonetheless, one group of workers did see its wages grow modestly over the past year: low-wage workers, particularly those in the bottom 10th percentile of wage-earners. Gould found that pay for the bottom 40th percentile grew 0.3 percent, while workers in the bottom 10th percentile saw their compensation go up by 1.3 percent.

Gould attributes that increase to recent minimum wage hikes.

"I think it's a pretty clear indication that they're working as they should," she said on a Thursday conference call with reporters.

Several states raised their minimum wage in 2014, including California, New York, New Jersey and Ohio. Additional wage hikes took place at the beginning of this year, when 20 states increased their minimum wages through a combination of new legislation and automatic increases.

The EPI analysis came out the same day that the White House issued its annual “Economic Report of the President,” which this year highlighted wage stagnation and again proposed a hike in the federal minimum wage. An Associated Press-GfK poll released on Thursday found that roughly 60 percent of Americans favor raising the minimum wage.

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