How are people around the globe getting paid for their work? In 2019, the highest minimum pay was afforded in Australia - $14.15 per hour. Meanwhile, workers in Russia earned a minimum of $1.04 per hour. And what about the US? Well, the situation is “not great, not terrible.”Here is a bunch of eye-opening recent wage growth statistics for the country
Wage Growth Statistics: Editor's Pick
- The wage increase in the US between 1960 and 2019 is 6.20%.
- For this period, the country has been showing a steady 4-5% year-over-year growth.
- The average hourly payments in April 2019 were 3.2% higher than in April 2018.
- The period from September 2018 to September 2019 marked a 2.7% payment increase for private industry workers.
- US wage growth in 2019 was reported as 5.24% in September, compared to 3.6% in the UK and 0.8% in Japan.
- US wages are finally beginning to rise steadily after the Global Fiscal Crisis from 2008.
- Wages are still growing slower than expected, considering the US unemployment rate.
- Nominal wages need to be between 3.5% and 4% to meet the changes in purchasing power. The US misses the target, marking only a 3% increase.
Are you intrigued yet? We have prepared plenty of other captivating data about the minimum and average wage in the US over time, as well as some exciting predictions concerning the projected fiscal policies of the US for the near future. Keep on reading to gain a deeper understanding of the labor market in the country - as it was, as it is, and as we expect it to be.
US Minimum wage over the years & Nowadays
There is a significant difference between the minimum and average US wages throughout time, as well as throughout the different states. We are going to collect the essential official numbers and provide a detailed picture, that will help you eventually grasp the processes behind the numbers.
1. President Franklin D. Roosevelt passed the very first federal minimum wage law back in 1938.
In 1938 Americans were paid the exact amount of 25 cents per hour. If we keep in mind the estimated "minimum wage vs. inflation" ratio, that would be worth approximately $4.45 nowadays.
2. The US Congress has changed the minimum wage law 22 times throughout history.
The current minimum pay rate - $7.25 an hour - was set more than ten years ago, as far back in time as 2009.
3. Many states have a minimum wage higher than the federal minimum of $7.25 per hour.
As of 2020, the highest minimum wage in the country is offered in Washington, DC, where workers are legally bound to receive no less than $14 per hour for their efforts.
4. As reported by the Economic Policy Institute, US wage growth 2020 significantly differs among states.
To be precise, exactly 21 states increased their minimum wages at the beginning of 2020, while there are overall 29 states and DC in the country that provide a minimum wage higher than $7.25.
5. As of 2019, it is estimated that around 25% of the Americans are earning less than $10 per hour.
In a nutshell, this means that about a quarter of the US citizens are generating an annual income, enough to put them below the official federal poverty level.
What about the Average wage in the US?
Now that you are aware of the statistics about the minimum wages around the US, let us dig a bit deeper and explore more details about the average and common ones.
6. US wage growth 2018 was over 5%.
It meant marking quite an improvement on 2017's 0.9% growth, 2016's 2.9% growth, and 2012's 1.4% growth. Anyway, that was a logical process, since the 2018 cost of living increase was estimated to be as high as 2%, compared to only 0.3% in 2017, and exactly 0.00% in 2016.
7. As of the first quarter of 2019, official statistics show that the average wage in the US was about $22.5.
In other words, this makes $905 per week for a 40-hour workweek. These numbers are about 2.7% higher than compared to the same period the previous year, marking a stable wage growth 2018.
8. The Bureau of Labor Statistics reports disturbing gender wage gap statistics.
According to official data, in the first quarter of 2019 males in the US earned an average yearly income of $52,208, while females made only $41,912, which is exactly a 19.7% difference.
9. The average US salary significantly differs between sectors.
In 2019, the average yearly income of service occupations was estimated to be $30,254, while professional occupations guaranteed more than two times greater annual income of $66,820.
10. In 2019, the median wages of American workers were also much dependent on their level of education.
As reported by The Bureau of Labor Statistics, workers with no high school degree made around $30,000 a year, while high school graduates - around $38,500 a year. Bachelors made significantly more - $70,000 a year, and advanced degree holders - almost $82,000 a year. These statistics mark between 100% and 200% difference in annual income, based on educational criteria.
US wage growth trends and prediction
11. The analysts' 2020 salary increase projections are estimating a 4% jump.
Their calculations refer to the end of the first quarter of the year, or the end of March 2020. US citizens can now use a special pay increase calculator to determine their expected pay raise.
12. The 2020 salary increase forecast and wage growth expectancy in the US is around 3.80%.
Analysts predict the 3.80% increase to become reality by the end of the year. Their estimations are based on following strict macro models and econometric analyses.
13. While wages grow, the US employment rate is expected to slightly decrease in the 2019 - 2030 period.
Precisely speaking, the unemployment rate, which was measured to be 3.7% in 2019, is projected to increase by almost one percent and reach 4.5% by the beginning of 2030.
Let’s sum up the data and see what it all means!
Now you are definitely packed with all the numbers needed to give you a comprehensive understanding of the wage growth statistics from the US. Yet, you might be feeling a bit lost about the key takeaways from all this data. Don't worry; we are here to sum it up in a short, minimalist summary. Here we’ll point out the main conclusions you can arrive at, based on the stats we mentioned.
In a nutshell, we can state that the average wage growth statistics for the US look generally encouraging.
Anyway, the change in payment policies is just a part of the bigger picture. It needs to be analyzed within a broader perspective. That should include factors, such as the country’s living standards and consumer purchasing power, as well as the global financial and political processes.
Shortly, salaries and wages are steadily rising, and this is a long-term trend. Anyway, this growth is bound to the ever-developing wage inflation and the rising living standard of the country. Statistics show that the wages in the US fail to meet the expectations and cope up with the percent range that is needed for the US workers to steadily benefit from an economic recovery.
In addition, the unemployment rate is also expected to rise in the following decade, after it witnessed a continuous reduction in the one before. These are indicators pointing to a stable, yet not rapidly developing economy. This promises stability, rather than quick financial gains for the workers in those states.
Of course, wage growth statistics tend to differ among the different states of the country, underlining a definite labor inequality, that is not bound to change - at least not until the next significant change in the federal minimum wage law, that remains the same from 2009 on.
We hope that our bunch of fascinating US Wage Growth Statistics for the United States were helpful enough for you to grasp the bigger picture and understand what is actually going on with American workers.