Study: Wage growth weak for a tight labor market

WORKER PRODUCTIVITY has increased by nearly 70% over the last 40 years, but hourly compensation levels have increased by less than 12% during that period, according to a new study by the Economic Policy Institute. / PBN FILE PHOTO

PROVIDENCE – Unemployment rates in the economic recovery of recent years are similar to those the nation saw in the late 1990s recovery, but wages have not grown nearly as fast or as evenly across race and gender as they did during that period, according to a new study.

Meanwhile, the gap between productivity and a typical worker’s compensation has increased dramatically since 1979, according to the recently released study from the Economic Policy Institute, a progressive think tank in Washington, D.C.

From 1996 to 2000, the median wage growth increased by more than 9% for white men, white women and black women, and by 10.3% for black men. But from 2015 to 2019, it was considerably slower for all groups, with growth slowing most for black men and black women at 5%.

Median wage growth gaps have been even more dramatic among college graduates. From 2015 to 2019, women college grads saw their wages grow just 3%, compared with 7.8% for men grads, while wages of black college grads fell 0.3% versus 6.6% wage growth for white college grads.

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In addition, the study compared the growth of productivity and compensation (wages plus benefits) over the 70-year period from 1948 to 2018. It found that productivity and compensation growth grew at similar rates from 1948 to 1979, with productivity growing by 108.1% and compensation growing by 93.2%.

But then compensation stopped keeping pace with productivity. From 1979 to 2018, productivity grew by 69.6% while compensation grew by only 11.6%, the study found.

The analysis covered data from the federal Bureau of Labor Statistics on total economy productivity, labor productivity and costs, employment statistics, employment cost trends, and the consumer price index. It also covered data from the federal Bureau of Economic Analysis on national income and more.

Scott Blake is a PBN staff writer. Email him at

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