Reader Michael writes:

…high income wage growth has grown much faster than medium and low income wage growth patterns.

Here’s a stab at taking a look at the data. First wages:

(Click on image to enlarge)

Figure 1: Year-on-Year growth rate in average hourly earnings from CES (blue), average wage from CPS (green), median wage from CPS (tan), from 2nd quintile (red), all in %. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, Philadelphia Fed Wage Tracker, NBER, and author’s calculations.

What about relative to inflation? Here, one would try to match up with the most appropriate deflators. Here’s my attempt.

(Click on image to enlarge)

Figure 2: Year-on-Year growth rate in average hourly earnings from CES, deflated by CPI-U (blue), average wage from CPS, deflated by CPI-wage earners (green), median wage from CPS, deflated by median household income CPI (tan), from 2nd quintile deflated by 2nd quintile household income CPI (red), all in %. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, Philadelphia Fed Wage Tracker, BLS, NBER, and author’s calculations.

So year-on-year real wage growth has been positive from between 2022M10 to 2023M02 onward.

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