Chart based on Social Security Administration data. The red line
represents average wages in 2012 dollars, and the blue line represents median wages.
New
numbers from the Social Security Administration show that the inflation-adjusted median wage of American workers for 2012 was 14 percent higher than in 1990. But it's also lower than it's been at any time since 1998. Measured in those real (that is, inflation-adjusted) dollars, the median wage of $27,519 last year was $980 less than in 2007 when the Great Recession began. In fact, the median fell by $4 between 2011 and 2012. Half of workers are below the median, half above.
The real average (mean) wage at $42,498 was also below what it was in 2007, by $423. But it grew in 2012 by by $484.
This widening separation between the average and median wage means something we're all-too-familiar with: Income inequality is worsening. The average is being drawn upward not because everybody is doing better but because earnings are increasing for those in the top tiers of the economy, while workers in the lower tiers are seeing stagnation in their paycheck.
David Cay Johnston writes:
In 2012, the data show, 67.1 percent of workers earned less than the average, up from 66.6 percent in 2011 and 65.9 percent in 2000. When a rising share of workers makes less than the average wage, it is another sign that wage increases are taking place only high on the income ladder, not on every rung. [...]
Total real wages per American were 6 percent lower in 2012 than in 2007. Compared with 2007, that 6 percent real decline in per capita pay means Americans working 52 weeks in 2012 collected paychecks equivalent to just 49 weeks in 2007.
While most workers are having a tough time, the SSA data reveal a dramatically different story at the top of the job market. The number of workers making $5 million or more grew almost 27 percent, to 8,982 workers, up from 7,082 workers in 2011. Total wages earned by these highly paid workers grew 40 percent—13 times the overall increase in compensation for workers.
A rising tide lifts all yachts.
