After another impressive employment report earlier this month, President Joe Biden trumpeted the strong position in which workers across the United States now find themselves.
“People are making more money,” the president said. “They’re finding better jobs. And after decades of being mistreated and paid too little, more and more American workers have real power now to . . . get better wages and to do what’s best for themselves and their families.”
That is undoubtedly true. Amid a tight pandemic labor market, the lowest-paid U.S. workers have seen solid gains in their wages, even after taking inflation into account.
But it is also useful to put these recent advances into a broader context. And when you do that, you realize that tens of millions of Americans are still a very long way from making a living wage.
More precisely, even if the growth in pay miraculously continued at the torrid pace it had from 2019 to 2021, it would take a full 10 years for a worker in the 20th percentile of the wage distribution—one who, at $14.09 an hour, makes more than 20% of the labor force but less than the other 80%—to earn a living wage of $20 an hour.
Indeed, most people’s pay has stagnated for so long, the last couple of years have served as something of a corrective—but a very limited one.
“We’ve dug ourselves a really, really deep hole over the past four decades,” says Lawrence Mishel, a distinguished fellow at the Economic Policy Institute. “You don’t fix that in a year or two.”
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