Who Is Actually Seeing a Raise?

The recent NFP report showed 2.2% gain in wages in the past month, which was higher than expected. But is this rise in wages trickle uniformly throughout the U.S. society? Let’s take a closer look at this issue.

The chart below shows the changes (year over year, percent change) in U.S. median weekly wages for all groups, people over 16 years:

Source of chart taken from FRED 

As you can see, in the past couple of quarters wages have grown by 0.6%, year over year. This is better than the levels recorded in the 2010-2013 so there is an improvement. But who actually sees this improvement?

Source of chart taken from FRED 

So blacks and African American group didn’t see any gains in the past couple of quarters: Wages fell by 3% and 0.75% in the fourth and third quarters, respectively.

Whites have done a bit better but not much impressive either with a 0.3% gain in the last quarter of 2014.

The groups that saw the highest gain in wages were Asians and Hispanics: Asians experienced a 3.3% gain in wages in the past quarter. For Hispanics the gain was for 2.8% (in all cases these are for 82-84 prices).

Source of chart taken from FRED 

Keep in mind that the Asians have the highest current weekly wage, but this group is also the smallest and as such could lead us to reach false conclusions (i.e. the Simpson paradox).

In any case, the main takeaway is that the majority group (white) didn’t see much of rise in wages, Blacks actually experienced a drop in wages and Asians and Hispanics saw a gain in earnings.

It’s good to consider the changes in wages among different demographics that could offer another perspective to the general trend in society.

For more see: