In stark contrast to prior decades, low-wage workers experienced dramatically fast real wage growth between 2019 and 2023, but many workers continue to suffer from grossly inadequate wages and middle-wage workers face significant gaps across demographic groups.
What charts like this ignore is that this can still have the highest end collecting far more in raw dollars off a smaller percentage. Someone making 30K gets a 10% raise it’s $3,000 but someone making 100K only has to get a 3% raise for the same raw value gain.
I’m not sure what the percentiles of the sample here are but that could play a big role too. If there are 90 people making 30K and 10 people making 100K you have quite a skew in the field where you would end up with some portion of those lower paid workers in the top quintile.
Unfortunately such charts get trotted out as policy making tools to say ‘no need for wage adjustment, look at how great they’re doing!’ and things go along as before.
The full report is interesting. I was going to argue about minimum wage increases, but the report already accounted for that by highlighting significant wage growth for the lowest percentile in states that still followed federal minimum wage.
Still, it’d be nice to know what the absolute values are. % are less impactful with lower numbers.
The problem with looking at things from a percentage stance is it can mask a growing disparity in income.
Try throwing these into a compounded interest calculator.
30,000 @ 10%
100,000 @ 5%
Compounded annually
Now eventually the lower starting point surpasses the higher one, but it takes about 25 years of consistent gains of double the higher starting one. That’s all assuming zero contributions to the principal over time, but someone starting off with more likely also has more loose cash to put into an investment. This is where the often mentioned part of giving breaks to the wealthy does nothing because they just invest it where the poor spend it on needs comes in.
Wages and investments aren’t a perfect match, but math is math. An interesting side note, if the higher starting pay where to put in $1000 / month which is way less than the difference between 100K and 30K per year, the end result is that they now have more than the lower starting one at the end of 50 years.
What charts like this ignore is that this can still have the highest end collecting far more in raw dollars off a smaller percentage. Someone making 30K gets a 10% raise it’s $3,000 but someone making 100K only has to get a 3% raise for the same raw value gain.
I’m not sure what the percentiles of the sample here are but that could play a big role too. If there are 90 people making 30K and 10 people making 100K you have quite a skew in the field where you would end up with some portion of those lower paid workers in the top quintile.
Unfortunately such charts get trotted out as policy making tools to say ‘no need for wage adjustment, look at how great they’re doing!’ and things go along as before.
The full report is interesting. I was going to argue about minimum wage increases, but the report already accounted for that by highlighting significant wage growth for the lowest percentile in states that still followed federal minimum wage.
Still, it’d be nice to know what the absolute values are. % are less impactful with lower numbers.
What does it matter if those making more also get raises? It’s still good that people making less got raises, it’s not a zero-sum game.
The problem with looking at things from a percentage stance is it can mask a growing disparity in income.
Try throwing these into a compounded interest calculator.
30,000 @ 10% 100,000 @ 5% Compounded annually
Now eventually the lower starting point surpasses the higher one, but it takes about 25 years of consistent gains of double the higher starting one. That’s all assuming zero contributions to the principal over time, but someone starting off with more likely also has more loose cash to put into an investment. This is where the often mentioned part of giving breaks to the wealthy does nothing because they just invest it where the poor spend it on needs comes in.
Wages and investments aren’t a perfect match, but math is math. An interesting side note, if the higher starting pay where to put in $1000 / month which is way less than the difference between 100K and 30K per year, the end result is that they now have more than the lower starting one at the end of 50 years.
I think it would have been good to not only have the absolute numbers, but also the numbers for changes in wealth and debt too.