Behind all the good economic news of recent years, from rising GDP to shrinking unemployment, there has been one stubborn and persistent sign of weakness: limited wage gains for US workers. But that may finally be changing — at least, for those outside the middle class.
Average wages in the private sector rose nearly 3 percent between the early 2017 and the beginning of 2018, according to data released Friday by the Labor Department. That’s vastly better than the roughly 2 percent annual raises that have typified our long recovery since 2010.
Even better, the gains seem to be spreading across regions and industries, with benefits to higher-wage and lower-wage earners alike.
Nearly every area of the country saw wage gains approaching that 3 percent figure, from the Northeast to the Deep South — and up and down the West Coast.
And it’s not just executives, managers, and other high-income folks who are benefitting. Some of the biggest gains are flowing into the pockets of low earners.
Over the past year, lower-wage workers have actually seen their paychecks rise slightly faster than those at the top — and far faster than those in the middle. The gap is especially pronounced among lower-wage women, whose earnings have jumped a remarkable 4.6 percent since last year.
The one group cut out from this boon is the American middle class. Wages for such workers rose less than 2 percent in the past year — and a bleak 1.6 percent for men.
It’s hard to know why, exactly, the middle class is struggling. Perhaps they’re concentrated in industries — such as health and education — that are lagging behind the wage-growth trend.
Or it could be a temporary blip, a final pause before middle-class workers get their share of today’s economic growth — especially if the labor market continues to tighten and businesses need to poach already-employed workers using tantalizing pay packages.
But the latest wage figures suggest this is the one task left, before our long recovery can be rightly celebrated as the best of economic times: end the stagnation that has held down median wages for decades.
Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the United States. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz
