President Ronald Reagan once asked, “Are you better off now than you were four years ago?” Today, one might ask, “Is your annual salary better off in this economic recovery than in previous recoveries?” Aviva Aron-Dine and Isaac Shapiro of the Center on Budget and Policy Priorities at cbpp.org recently analyzed salary information from the U.S. Commerce Department and concluded that wages and salaries have increased at a 1.7% average annual rate (adjusting for inflation) during the current economic recovery. They compared this salary information to previous economic recoveries (post-World War II) when workers’ wages and salaries increased at an average annual rate of 3.7%.
Aron-Dine and Shapiro also compared this salary information to corporate profits. During the present economic recovery, they found that profits for corporations have risen at an average annual rate of 13.7%, higher than previous economic recoveries (post-World War II) when corporations' profits had an average annual growth rate of 7.9%. They conclude that “the share of national income captured by corporate profits… is at its highest level since 1950,” while “the share of national income going to wages and salaries remains at the lowest level on record (going back to 1929).”
How has your annual salary grown during the current recovery? Want to try a salary comparison? Take our salary survey.