Income and Wages

Inflation-adjusted wages for the typical American worker are rising, and the gap between the best-paid and worst-paid workers is narrowing, according to an analysis of government data by the leftist Economic Policy Institute.

  • Wages for the median male worker climbed at an annual rate of 2.6 percent between 1996 and the middle of 1998.

  • Between the last business-cycle peak in 1989 and 1996, median wages

  • Wages for workers who make $6.99 an hour rose at a 3.6 percent annual rate, while wages for those making $24.63 an hour rose at a 2.3 percent annual rate.

  • The typical male worker now earns $12.63 an hour, while the typical female worker makes $9.88.

Inflation-adjusted compensation has been rising faster than productivity for the past two quarters. The institute said recent wage gains reflect several factors -- the extraordinarily low unemployment rate, an unexpected decline in the inflation rate and recent increases in the minimum wage.

Source: Lawrence Mishel, Jared Bernstein and John Schmitt, "Finally, Real Wage Gains," Issue Brief #127, July 17, 1998, Economic Policy Institute, 1660 L Street, N.W., Suite 1200, Washington, D.C. 20036, (202) 775-8810; David Wessel, "Inflation-Adjusted Wages Are on the Rise for Typical U.S. Worker, Shifting Trend," Wall Street Journal, July 17, 1998.

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