Wednesday, May 7, 2014
Real median wages for occupational employment decline -0.6% in 2013*
- by New Deal democrat
Most of the measures of real wages that I have tracked bottomed either in the beginning of 2013 or in late 2012, so this one comes as a bit of nasty surprise. With an asterisk.
Every year in May, the BLS, in cooperation with state workforce bureaus, compiles a list of median wages for hundreds of occupations. In the last few years, these have shown that jobs in the 4th quintile, i.e., the lower middle class or working poor, have taken the biggest hit.
Like other measures of real wages, they reached a peak at the end of the last recession when gas prices were under $1.50 a gallon and thus mild nominal increase in wages were paired with about a -1% deflation in overall prices.
With gas prices stabilizing in the last 3 years, I certainly expected even small nominal wage increases to lead to an increase in this measure of wages as well.
Not so. As of May 2013, the median wage in the US was $16.87. In 2012 it had been $16.71, but adjusting for inflation, that becomes $16.98, which means that real wages were down -0.6%.
Now here is why there is an asterisk. The result is likely due to the way the BLS conducts the survey, as explained in this technical note: the 2013 results are due to results obtained over 6 surveys from November 2010 through May 2013. That means the survey period coincided almost perfectly with the trough in other wage measures.
If we treat the survey as an average of wages from late 2010 through early 2013, then the continued decline makes sense. Unfortunately we won't have a comparison until one year from now.