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This narrowed the gap from the peak by 14 percent (Kenneth, 2012). Table 1 below summarized the trend.
Based on Thomas’ report, 39 years had elapsed and yet the real wage was still below the reported peak wage of 1972. In the real sense, by 2011, it was still 14 percent below the peak wage (Thomas, 2012). Despite the dwindling wage levels for workers in the country, the Federal Reserve Bank claimed that the country’s productivity was at a steady increase during this period.
The study by Lawrence, Jared and Heidi (2009) showed that wage trends fueled the inequalities in income growth in the United States. In the real sense, wage comprise of three quarter of the family’s total income. However, for the broad middle class group, salaries and wages consist of more than three quarters of the families’ income. It was estimated that between 1973 and the year 2011, real hourly wage attributed to a median worker only reported a 10.7 percent increase. This was mostly witnessed in the late1990s. On the contrary, real wage again registered a stagnated growth between 2002 and 2003. This is why the last decade is referred to as lost decades in terms of wage growth. Another prediction based on the study is that in cases unemployment problem persists, there is high likelihood that the country will have another lost decade in the near future.
This section will provide the trends in the employees wage for the last two and half decades. Wage trend is known to have played a critical role in the families and households income trends, particularly, with the growing wage inequality being reported in the United States (Lawrence, Jared and Heidi, 2012). Basically, wage stagnation led affected income growth in the year 2000. It also contributed to high unemployment rates and recession of 2007 and 2011. The reason for the stagnation includes weak recovery phases between 2002 and 2007 and loss of income during the ...Show more
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This paper will look at this issue with focus on wage trend in the past 25 years. To start with, Kenneth (2012) quoted that, “the real wages remain below their peak for 39th straight…
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