While there has been positive news about recent wage growth, looking back over the last 40 years reveals a different story for the average worker. Adjusting for inflation, wages (as measured by average hourly earnings reported monthly by the Bureau of Labor Statistics) were only around 11 percent higher in 2018 than they were in 1979. In fact, during the 1980s and early 1990s, inflation-adjusted wages actually decreased, and didn’t reach their 1979 level again until 2001. Since the end of the most recent recession in 2009, wages (adjusted for inflation) have grown by a total of 4 percent.
Over the past several decades, wages have grown faster for those with higher incomes. In a 2019 report on the distribution of household income, the Congressional Budget Office (CBO) found that between 1979 and 2016 cumulative growth in average wages was 70 percent for the top one-fifth of earners compared to 59 percent for the lowest one-fifth.
Peter G. Peterson Foundation