Wages finally eclipse prior peak reached in 1972

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Wages of U.S. workers—adjusted for inflation—have finally eclipsed the peak reached in 1972.

The 1972 peak was eclipsed in 2020 partly because of the impact of the Covid-19 pandemic. Business boosted wages in the face of higher employee risks, with wages peaking in April 2020 but remaining above the 1972 mark in the months that followed.

Also note that:

  • This milestone refers to average hourly wages for production and nonsupervisory workers in constant dollars—which adjusts for inflation measured by the Consumer Price Index and converts to latest-year dollars.
  • Constant-dollar wages hit bottom in 1995 and have been trending higher with improving growth ever since.
  • Wage growth in constant-dollar terms has been improving over the last three decades primarily because consumer price inflation has been easing over that time.
  • Improvement in wage growth is not evident in current dollar or nominal terms, however. Growth in current dollars has been successively weaker over the past four decades.

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