New analysis from the Economic Policy Institute on the performance of wages across the distribution in 2014 finds that with few exceptions inflation-adjusted wages fell or stagnated for most groups. This isn’t anything new as there has been a long-term trend of wage stagnation that has meant the majority of workers are struggling to make ends meet even as they are contributing to grow the economy.
What is new and important from this analysis is what happened for wage earners at the bottom end of the wage scale. Workers in the 10th percentile saw their wages increase on an hourly basis by 11 cents or by 1.3 percent. The authors attribute this increase to the series of state-level minimum wage increases that have occurred in states in 2014 and which have bene proven to lift wages particularly for those at the bottom of the wage distribution. It turns out that nearly half of the country’s workforce lived in states where the minimum wage was increased in 2014.
For those states that haven’t raised the minimum wage, here is some further evidence of the real benefit of doing so. As the report author notes:
The great news in this story is that policy can actually affect the labor market. And, it is imperative that we use all the policy levers at our disposal to help rejuvenate the economy to create jobs and build stronger income growth for the 99%.
To read the full report, click here.