The Department of Labor
that productivity in the nonfarm sector of the economy rose at an annualized 3.0 percent in the third quarter. Reuters reports
Productivity rose at a 3.0 percent annual rate after increasing at a 1.8 percent pace in the second quarter, the Labor Department said on Monday, driven by a 4.7 percent rise in output. [...]
Unit labor costs—a gauge of the labor-related cost for any given unit of output—fell at a 1.4 percent rate in the third quarter, roughly double the originally estimated fall, underscoring the lack of wage-related inflation pressures in the economy. Unit labor costs had risen at a 2.0 percent pace in the second quarter.
There is another way to label that lack of wage-related inflation. It translates, as it has for more than three decades, into wage stagnation. As we've seen for the past 35 years, productivity gains have, to put it mildly, not been equally shared. Since the turn of the twenty-first century, growth in wages has been flat. And that's been worse recently. The real (inflation-adjusted) median wage as measured by the Census is nearly $1,000 less than it was in 2007. Lawrence Mishel and Heidi Shierholz noted
• According to every major data source, the vast majority of U.S. workers—including white-collar and blue-collar workers and those with and without a college degree—have endured more than a decade of wage stagnation. Wage growth has significantly underperformed productivity growth regardless of occupation, gender, race/ethnicity, or education level.
• During the Great Recession and its aftermath (i.e., between 2007 and 2012), wages fell for the entire bottom 70 percent of the wage distribution, despite productivity growth of 7.7 percent.
• Weak wage growth predates the Great Recession. Between 2000 and 2007, the median worker saw wage growth of just 2.6 percent, despite productivity growth of 16.0 percent, while the 20th percentile worker saw wage growth of just 1.0 percent and the 80th percentile worker saw wage growth of just 4.6 percent.
• The weak wage growth over 2000–2007, combined with the wage losses for most workers from 2007 to 2012, mean that between 2000 and 2012, wages were flat or declined for the entire bottom 60 percent of the wage distribution (despite productivity growing by nearly 25 percent over this period).
• Wage growth in the very early part of the 2000–2012 period, between 2000 and 2002, was still being bolstered by momentum from the strong wage growth of the late 1990s. Between 2002 and 2012, wages were stagnant or declined for the entire bottom 70 percent of the wage distribution. In other words, the vast majority of wage earners have already experienced a lost decade, one where real wages were either flat or in decline.
This lost decade for wages comes on the heels of decades of inadequate wage growth.
• For virtually the entire period since 1979 (with the one exception being the strong wage growth of the late 1990s), wage growth for most workers has been weak.
Put another way, the bottom 10 percent of the working population has seen its real wages fall 5.9 percent since 1979. The upper 5 percent has seen its wages rise by 39 percent in the same period.