In 2000, the economy was toward the end of a recent expansion. So, comparing today’s data with that marker provides some interesting information. Does this data suggest that the economy isn’t improving as much as some claim — or that skills don’t matter as much as we’ve been lead to believe?
“I don’t think it’s a skills story,” Elise Gould, senior economist at EPI and author of the report told CBS News. “Even if we look at people with a college degree, the bottom half have lower wages than in 2000. There’s a pulling apart at the very top.”
The Real Problem Is Rising Wage Inequality
College graduates, on average, earn more than workers without degrees. The average high-school graduate earned $17.25 in 2016, while the average hourly earnings for college graduates was $31.93. However, median earnings stood at $24.99 per hour in 2016, which is about 1.5 percent less than in the year 2000. Workers whose earnings fell below that median mark earned less in 2016 than they did in 2000, but those in the 60th percentile and above earned more.
In short, the problem is wage inequality.
The Value of an Education
While a college degree is not guarantee of higher pay, it’s still generally in workers’ best interests to get an education. Between 2000 and 2016, wages increased for college graduates — although not enough to make up for rise in wage inequality that happened over that time. Since 2007, the top 20 percent of earners have seen the strongest wage growth.
For more information, be sure to check out the full analysis on the state of American wages from the Economic Policy Institute.
Tell Us What You Think
How has your pay changed over the years? We want to hear from you! Leave a comment or join the discussion on Twitter.