Quick Hit Ellyn Fortino Friday February 20th, 2015, 2:15pm

Report: 2014 Wages Stayed Flat Or Declined For Almost All U.S. Workers

Real hourly wages remained flat or fell for nearly all U.S. workers in 2014, including those with a college degree, according to an analysis of new wage data by the Economic Policy Institute (EPI), a liberal think tank.

"Last year was yet another year of poor wage growth for American workers," reads EPI's study, which looked at the most recent and available wage data by decile and educational attainment. Wage data was examined for workers in the bottom 10th percentile up to the 95th percentile.

In 2014, real wages among top earners fell by 1 percent at the 95th percentile and 0.7 percent at the 90th percentile, according to the analysis released Thursday. U.S. workers with either a four-year college degree or an advanced degree also saw their inflation-adjusted hourly wages drop by 1.3 percent and 2.2 percent, respectively.

"This is important in particular because it sends a clear message to the Federal Reserve Board: If even these groups of highly-educated workers facing the lowest rates of unemployment are seeing outright wage declines, there's clearly lots of slack left in the American labor market, and policy makers, particularly the Federal Reserve, should not try to slow the economy down in an effort to keep wage and price inflation in check," said EPI senior economist Elise Gould. "They're both already firmly in check, even for the most privileged workers."

There were two exceptions to the declining or stagnating wage trends, including among workers in the bottom 10th percentile, who saw their wages grow by 1.3 percent, or 11 cents. That increase is due to 2014 minimum wage hikes in 18 states, according to the report.

"I think it's a pretty clear indication that (minimum wage increases) are working as they should," Gould said of the wage growth at the 10th percentile. "The minimum wage should be lifting up people who are at the bottom of the wage distribution, creating a wage floor and, therefore, we should see their wages rise, and that is what we do see in those states that have enacted minimum wage increases."

Wages also grew by 0.3 percent, or 3 cents, among workers at the 40th percentile, the report found.

EPI researchers used Current Population Survey data for their analysis, which did not show whether wages increased or declined among those in the top 1 percent and other categories of high earners.

"We're really not getting a good look at [how the top 1 percent fared] with this data," explained Josh Bivens, EPI's research and policy director. "And then of course there's non-wage income ... and that's not captured in this report either. The report is all about hourly wages, which is what's relevant to 90 percent of Americans."

Real wages among men across the wage distribution have remained higher than women's since 2007, before the Great Recession. Women have done a bit better than men in terms of wage growth since 2007, Gould said, but they still earned just 83 cents, on the median, for every dollar paid to men last year.

Additionally, hourly wages among workers of color remained "far below those of their white counterparts" last year, the report found.

"In 2014, the median black and median Hispanic wages were only about 75 percent and 70 percent, respectively, of the median white wage," reads the report, which notes that "all races and ethnicities and both genders have median wages in 2014 lower than in 2007."

In addition to her recommendation that the Federal Reserve "keep its foot off the brakes and allow the recovery to gain a firmer foothold," Gould said additional policies should be enacted to address the "broad-based problem" of wage stagnation.

"Wage stagnation is the result of specific policy choices made over the past 30 years, and it can be reversed by policy decisions going forward," she said.

Such policies include increasing the minimum wage, strengthening workers' ability to unionize, reducing wage theft, revamping overtime protections and fixing worker misclassification, among other recommendations.

EPI's report was released the same day Wal-Mart announced its plans to raise the hourly minimum wage for 500,000 of its full- and part-time U.S. workers. The company will be raising workers' hourly minimum wages to $9 by April and $10 by February 2016.

When asked about the potential impact of Wal-Mart's proposed pay raises on wage trends, Bivens said even if 500,000 of the retailer's employees see a wage bump, he doubts that will show up in overall wage data, noting that there are more than 140 million workers in the U.S. economy.

That should "give people some perspective on this" problem of sluggish wage growth, Bivens said.

"The idea that because one company, even a very large company, has announced a wage increase somehow we have solved the problem of American wage growth, that's just not the case," he stressed, adding that, "Unless Wal-Mart and every other employer in America commits to wage-growth going forward from now that tracks overall economy-wide productivity, our wage-growth problem is nowhere near solved, and serious measures ... are still needed."


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