Lower-paid workers receive solid gains

For six years after the recession, the lowest-paid workers received the thinnest wage gains — and in several years their pay declined. Yet since 2015, they have clawed back some of those losses.

For the lowest-paid onefifth of the workforce, wages rose 2.3 percent in 2017, adjusted for inflation, according to the Economic Policy Institute, a liberal think tank. That topped the average for middle-income workers, whose pay gains inched up just 0.2 percent.

It’s also ahead of the richest one-tenth of workers, whose pay rose 1.9 percent. Low-paid workers also saw a huge gain in 2016 that ran far ahead of middle-income and wealthy employees.

What’s driving the outsize increases for lower-paid workers?

More than 20 states have raised their minimum wages above the federal minimum of $7.25, some of them substantially higher. The minimum is now $11 in California, for example, and $11.50 in Washington state.

The ultra-low unemployment rate has also helped. Many businesses say they are desperate to find workers. And in some lowerskilled industries, such as restaurants, they have to pay more to find staff.

“We’re seeing about as strong a labor market for less-skilled workers as we’ve seen in a really long time,” said Jason Furman, the top White House economist under President Barack Obama.

CEOs still raking it in

nearly 18 percent, according to a report by the Economic Policy Institute. That compares with a puny raise of just 0.3 percent for all other workers in the same industries. Both figures are adjusted for inflation.

Larry Mishel, senior economist at EPI, said CEO pay jumped largely because it is closely tied to the health of the stock market. The S&P 500 stock index soared 22 percent in 2017. Most CEO pay comes in the form of stock options, which are much more lucrative in a rising market.

That means a plummeting stock market can lower CEO pay, which fell nearly 30 percent in 2008, during the recession. Yet for perspective, the pay of CEOs of the largest firms still averaged nearly $11 million that year, according to the EPI’s figures.

In 2017, large-company CEOs made $18.9 million, on average. That is 312 times the average pay of workers in the same industries, which reached $62,431 last year.

Restaurants and construction trounce manufacturing

Workers in some industries have also done better. In July, restaurants and bars handed out raises of 4 percent from a year earlier, before taking inflation into account. Pay for construction workers increased 3.2 percent. Even retail workers’ pay grew 2.9 percent, slightly better than the average.

Yet for manufacturing workers, pay has risen just 1.2 percent in the past year even as hiring has accelerated. U.S. factories are increasingly using temporary workers, who typically receive less pay. Temp workers now make up roughly 12 percent of manufacturing workers, according to the EPI.

U.S. automakers are also now paying new and younger employees much less than older workers, likely contributing to lower overall pay.