Tuesday, November 05, 2013

No, it's not just your imagination!

Median wage falls to lowest level since 1998

By David Cay Johnston, Al Jazeera

 Last year the median wage hit its lowest level since 1998, revealing that at least half of American workers are being left behind as the economy slowly recovers from the Great Recession.

But at the top, wages soared — the latest indication in a long-running trend of increasing inequality, with income gains going to top earners while the majority of workers see stagnant or falling wages.

Al Jazeera is the first news organization to report these figures from the Social Security Administration (SSA), which were released late in October.

The median wage — half of workers make more, half less — came to $27,519 last year, virtually unchanged from 2011. Measured in 2012 dollars, the median wage was down $4.

The 2012 median wage was at its lowest level since 1998, when the median stood at $26,984.
From its all-time peak in 2007, the median wage was down $980. That means someone at the midpoint in pay worked 52 weeks last year but earned about the equivalent of working just 50 weeks at 2007 pay levels, the last peak year for the economy.

The average wage, on the other hand, improved last year. It increased to $42,498, up $434, or 1 percent from 2011 after considering inflation. But the average wage remained below its $42,921 peak in 2007, I calculated from the SSA data.

These figures from the SSA cover only cash pay, not fringe benefits such as health insurance and pensions. The figures are reported to the Internal Revenue Service to verify what individuals put on their tax returns.

What the numbers mean

When the average wage grows but the median wage stagnates, it means that, statistically, only workers in the top half of the job market are experiencing increases. My analysis of SSA data shows the growth is mostly in the top quarter, which starts at just under $50,000 in annual pay.

In 2012, the data show, 67. 1 percent of workers earned less than the average, up from 66.6 percent in 2011 and 65.9 percent in 2000. When a rising share of workers makes less than the average wage, it is another sign that wage increases are taking place only high on the income ladder, not on every rung.... Read the rest.

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