Wage Growth in Last Decade at Record Low

This slide shows the real growth in wages by decade in the US. Wage growth in the last decade was less than 5%. That is lower than wage growth in the Great Depression. During the Great Depression the collapse of the banks wiped out the savings of households and there was no cushion to support job loss. In the Great Recession banks savings remain intact and other investments have provided a cushion against job loss and or slow wage growth. The average wage growth by decade since WW II has been 25%. There was only one exception to 25% growth during when it his 18%.

Low wage growth has caused many households to use their savings to support consumption. Households with incomes above $150,000 have done better than those in the lower income brackets but the economy cannot be supported only by high income groups.