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Percent change in U.S. real wages by income percentile, 2007-14

David Ruccio

According to the U.S. Bureau of Labor Statistics, since the crash of 2007-08, real wages have declined for the bottom 85 percent of workers (outside of a small bump for those at the very bottom of the pay scale) but increased in real terms for those in the top 14 percent (especially a few percentage points at the very top). (The vertical axis shows real wage decline or growth, and the horizontal axis indicates percentages of the wage distribution.)

This picture of pay inequality lends support to other studies (e.g., by David Autor]) that find positive wage growth among highly paid jobs but wage stagnation among jobs with lower pay. Since most of those whose wages have

increased (CEOs, financial executives, lawyers, and so on) are receiving distributions of the surplus produced by everyone else, we can see once again the connection between the worsening conditions of those at the bottom and the growing fortunes of a small group at the top.

Source: Real-World Econ Rev,16 Jan 2016

Dr David Ruccio is Professor of Economics at the University of Notre Dame, USA

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