American workers’ wages are growing at just 2 percent per year, the slowest rate since at least 1965, according to a new research note from Goldman Sachs.
That means wage growth is only barely outpacing inflation, which rose by 1.5 percent last year. The research also expects the trend to continue.
Wage growth has been particularly slow in the aftermath of the recession. Real wages have declined 7 percent since 2007 and the pace of growth has been slowing down. There are currently about three job seekers for every job opening — making it risky for the employed to push their bosses too hard for pay increases — and those who do find a job are increasingly ending up in work that pays very little.
But wage stagnation is not a brand new trend. American workers have seen a “lost decade” of wage growth, with wages flat or declining for the bottom 60 percent of the workforce between 2000 and 2012. At the same time, workers’ productivity jumped 25 percent during that time. And things have been bad at the bottom of the income scale for decades: since the 1970s, the richest 20 percent of Americans have seen far more income growth than the bottom.
The paltry growth in wages has helped fuel a movement to raise minimum wages, from fast food workers demanding $15 an hour to President Obama backing a federal wage of $10.10 an hour to governors and state lawmakers pushing to raise their wages.