Income and Wages

Wages For Lowest-Paid Jump

Economic growth now appears to be benefiting workers at the bottom of the economic ladder, according to Labor Department data.

  • Adjusted for inflation, weekly earnings for those with wages below those earned by 90 percent of the work force rose 1.6 percent last year, to $260 -- the first jump since 1991 and the biggest since the government started collecting such figures in 1979.

  • Weekly earnings for the top 10 percent rose by only 0.9 percent last year.

  • According to the Federal Reserve, vigorous demand at New England temporary employment agencies has produced wage increases of up to 15 percent, and wages in the retail sector are running 4 percent to 6 percent higher than the previous year.

  • Meanwhile, unemployment among high-school dropouts fell to 7 percent earlier this year -- down from 8.8 percent a year earlier and from 11.5 percent in 1992.

Since the early 1970s, a variety of forces, from the decline of organized labor to the flood of low-skilled immigrants, has suppressed wages at the lowest level of employment. Except for the past two years, the gap between earnings of college graduates and high-school graduates had been widening. But that stopped in 1996 and 1997 -- partially because of the tight labor market, economists report. Companies which would have hired more experienced workers in the past are now taking people without experience and training them on the job.

Source: Jacob M. Schlesinger, "Wages for Low-Paid Workers Rose in 1997," Wall Street Journal, March 23, 1998.

Home | Support Us | All Issues | Social Security | Debate Central | Contact Us

Dallas Headquarters: 12770 Coit Rd., Suite 800 - Dallas, TX 75251-1339 - 972/386-6272 - Fax 972/386-0924
Washington Office: 601 Pennsylvania Ave. NW, Suite 900 South Building - Washington, DC 20004 - 202/220-3082 - Fax 202/220-3096
© 2001 NCPA