A report by the Economic Policy Institute (EPI) titled Wage Inequality Continued its 35-year Rise in 2015 shows that real hourly wages in America increased from 2014 to 2015 by 2.1% only because of a sharp decline in inflation. Nominal wages have not increased and wage inequality continues to grow.
The wage gap between the top income earners and those in the rest of the income distribution has increased dramatically since 2000, while the gap between the middle and bottom earners has remained relatively stable. In 2015, the wage ratio between the highest wage workers (95th percentile) and the lowest wage workers (10th percentile) was 6.3, compared to 6.2 in 2014 and 5.5 in 2000. The wage ratio between middle wage workers (50th percentile) and the lowest wage workers was 1.9 in both 2015 and 2000.
The report also examined wage inequality by gender. The lowest wage female workers have made wage gains relative to the lowest wage men, while the highest wage female workers have lost ground relative to their male counterparts. Between 2000 and 2015, the lowest income women’s wages as a share of the lowest income men’s wages increased from 87.3% to 92.2%, while the highest income women’s wages decreased from 75.6% to 73% relative to those of highest income men. Between 2014 and 2015, the lowest income female workers gained 1.3% in wages relative to the lowest income men’s wages, while the highest wage female workers lost 5.6% relative to their male counterparts. The growth in wages for the lowest wage female workers can largely be attributed to state-level increases in the minimum wage. The lowest income women experienced an absolute increase of 5.2% in wages in states that increased the minimum wage compared to a 3.1% increase in states without increases.
White, black and Hispanic workers saw real wage growth between 2014 and 2015 at all wage levels. However, there is a long-term trend of increasing disparities in wage growth among black and Hispanic workers relative to white workers. Between 2000 and 2015, the lowest income black workers’ wages declined 2.2% relative to the wages of their white counterparts. The highest income black workers’ wages declined 3.7% relative to those of the highest income white workers. Among Hispanic workers the disparity grew at the highest end of the income scale, but not at the lowest. Hispanic workers’ wages relative to white workers’ wages grew 5.9% among the lowest wage earners, but declined 5.5% among the highest wage earners.
EPI utilized data from the Bureau of Labor Statistics, the EPI Minimum Wage Tracker, and the Current Population Survey Outgoing Rotation Group microdata for its analysis.
Wage Inequality Continued its 35-year Rise in 2015 can be found at http://bit.ly/1Mn16fj.