US low-income workers gain ground. Finally.
| Washington
A new year has arrived with pay raises in store for many of the lowest-income U.S. workers. Wages have actually been growing faster for the bottom quarter of U.S. earners than for other income groups 鈥� a positive sign in an economy that has been defined in recent decades by widening inequality.
A worker shortage has forced many employers to raise pay. Our chart package below shows the progress, and it illustrates another key reason: Many state laws will see scheduled increases to聽minimum wage this year, or聽annually adjust that wage for inflation. The changes for 2020聽span from Alaska to Florida. In some states, minimum pay has a range that depends on the employer size, geography, type of work, or (in Nevada鈥檚 case) whether a job comes with health insurance.聽
Some economists warn of when wage levels are mandated. It can be an incentive for companies to substitute automation for employment. But many experts on the issue say that, on balance, the effects of boosts in minimum wages across America have been .
鈥淭hese real minimum wage increases since 2010 have not only raised low-wage workers鈥� wages generally,鈥� analysts at the left-leaning Economic Policy Institute last year. They 鈥渉ave also played an important role in reducing the gender pay gap at the bottom of the wage distribution.鈥�
Federal Reserve Bank of Atlanta; National Employment Law Project, U.S. Department of Labor
Why We Wrote This
A counter trend to rising inequality: Low-wage workers are seeing bigger raises than high-wage earners.
