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For Every Education Level, Real Wages Have Gone Down So Far This Year


Real hourly wages declined for almost every segment of the U.S. workforce in the first half of 2014, according to a briefing paper released Wednesday morning by the Economic Policy Institute, a liberal think tank.

“The last year has been a poor one for American workers’ wages,” economist Elise Gould, who directs EPI’s health policy research, writes in the report. Analyzing data from the government’s Current Population Survey, Gould found that workers at the 20th, 30th, 40th, 50th, 60th, 70th, 80th, 90th, and 95th percentiles all experienced declines (ranging from 0.5 percent to 2.0 percent) in their real wages in the first half of 2014 compared with the same period last year. Real wages declined among workers with no high school degree (0.6 percent), with just a high school degree (1.1 percent), with some college (1.0 percent), with a college degree (1.6 percent), and with an advanced degree, too (2.7 percent).

EPI contends that’s not a fluke: From the first half of 2007 to the first half of this year, real wages declined 4.9 percent for workers with a high school degree and 2.5 percent for workers with a college degree. Workers with advanced degrees registered an increase of only 0.2 percent over those seven years. “On the whole,” argues Gould, “the broad wage trends by education level over the last decade and a half make clear that wage inequality cannot be readily explained by stories about educational credentials and technology; wage inequality has increased steadily, yet even those with a college diploma or advanced degree have experienced lackluster wage growth.”

Gould notes that real wages did go up over the past year for one group: workers down at the 10th percentile of income. The increase was ever so slight, from $8.36 an hour to $8.38. She credits that increase in part to state minimum wage increases—be they bigger scheduled increases or smaller automatic ones from indexing to inflation—that affected states where about 40 percent of the workforce lives. In those states, she finds, real wages rose 0.9 percent, on average, for workers in the 10th percentile. In the rest of country, real wages fell 0.1 percent for the same group.

EPI is primarily funded by foundations; its backers also include labor unions and corporations. On Monday, EPI labor economist Heidi Shierholz was named the next chief economist for the U.S. Labor Department.

Eidelson is a reporter for Bloomberg Businessweek in Washington.

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