Every month for the last year, the Bureau of Labor Statistics’ wage data releases have continued to demonstrate that workers simply aren’t getting ahead. Despite some nominal growth, real wage growth has been consistently hovering around zero (rising at just a 0.2 percent annual rate from 2016-2017).
At the same time, this year’s annual data release from the Census Bureau showed us that the median household income has risen to $61,370 in 2017, a 1.8 percent increase even after adjusting for inflation.
How are real incomes rising even as real wages are flat? The answer lies in the simple fact that both hours worked and employment have been rising consistently. Annual income depends not only on wages, but also on the number of hours a person works in a year and the share of the population that is working.
Figure 1 tracks these components of annual income over the last few years, scaling up the changes for 2018 to take into account the lack of data for September through December.
Chosen excerpts by Job Market Monitor. Read the whole story at If real wages aren’t rising, how is household income going up?