The Economy Is Improving, But Not for Everyone
The upper 40% is doing decently, but everyone else is stagnating.
The BLS reported today that weekly earnings for full-time wage and salary workers rose 3 percent in the first quarter of 2014 compared to a year ago. Since inflation is running at 1.4 percent, that's good news. Earnings are going up.
But wage gains are pretty unevenly distributed. Jeffrey Sparshott passes along a recent Labor Department note which concludes that all of the wage gains since 2009 have gone to the top 40 percent. The poor, the working class, and the middle class have seen no gains at all. This is reflected in the chart on the right, which shows weekly earnings for production and nonsupervisory workers. Weekly earnings for this group have been rising at a rate slightly above inflation for the past year, but not by much. Nor is that number getting better: In the first quarter of 2014, weekly earnings rose only 1.8 percent.
There are some positive signs that the labor market is tightening a bit—decent job creation rates, fewer unemployment claims, rising earnings for full-time workers—but not everyone is benefiting. This remains a pretty uneven recovery.