I posted a piece yesterday about the factors behind the growth of wage inequality. Well, today we find the BLS releasing some relevant data on the issue. The figure below shows the annual growth rates of weekly earnings of full-time workers by various wage percentiles.
Two things to note: the staircase function characteristic of inequality is clear—the higher your pay, the better (or less bad) you did. Second, the bottom half of full-time workers lost ground in real terms.
Weekly earnings of 10th percentile workers fell by almost two percent, to about $350 per week. That’s $18,200 per year, assuming full-year work, a bit below the poverty threshold for a parent with two kids. Paychecks of workers at the middle of the pay scale were relatively unchanged last year, down half-a-percent in real terms. High-wage workers, those at the 90th percentile, did the best, up almost two percent, to $1,875 per week, or $97,500 per year.
This is, of course, a continuation of a long-term trend. Back in 2000, the weekly earnings at the 90th %’ile were 4.5 times that at the 10th percentile. By last year, that ratio had grown to 5.2.
The economy grew in 2012—GDP and productivity were up and more folks were working. Once again, however, much of that growth eluded many of those folks.