The False Promise of Last Year’s Wage Gains
According to EPI, if wages had kept pace with productivity growth over 30 or so years, a worker making $50,000 today would instead be earning about $75,000. Instead, the gains from productivity have been channeled elsewhere, often to executives and shareholders.
In 2015, things seemed like they might be getting back on track. Nominal wages (that is, wage growth not adjusted for inflation) increased by 1.8 percent on the year. But according to the report, 2015’s uptick was caused by a decrease in inflation rather than an improvement in actual wages, and when looking at real wages (adjusted for inflation) and factoring in core inflation, which specifically removes more volatile portions of the inflation measure—wage growth was zero.