U.S. Bottom 10% Real Wages See Significant Gains, Challenging Economic Decline Narrative

Recent data indicates a notable increase in real wages for American workers, particularly those in the lowest income brackets, sparking discussion about the overall economic well-being of the populace. A social media post from user Hunter📈🌈📊 highlighted this trend, stating, "> American wages, adjusted for inflation, are higher than they've ever been. This includes the bottom 10th percentile, whose wages are up on average by 40% since 1973." The tweet directly challenged the notion that "Americans are poorer than they used to be.

Analysis from the Economic Policy Institute (EPI) supports a recent acceleration in wage growth for low-wage workers. Between 2019 and 2024, the hourly real wage for the lowest-paid 10% of workers experienced a substantial 15.3% increase. This period marks a reversal of long-term trends, with low-wage workers seeing the fastest growth compared to other parts of the wage distribution.

This robust growth at the lower end of the wage spectrum is attributed to a combination of policy decisions and a tight labor market. Enhanced relief measures during the pandemic and reduced frictions in the labor market boosted workers' leverage, especially for low-wage earners. Additionally, state-level minimum wage increases in many regions contributed to these gains, even as the federal minimum wage remained stagnant.

Despite these significant advancements, low-wage workers continue to face economic challenges. The EPI notes that even with the recent growth, wages for the bottom 10th percentile, averaging $14.26 per hour in 2024, are often insufficient to cover basic family needs in any U.S. county. While hourly wage gaps have narrowed recently, the overall concentration of household income since the 1970s has not been substantially reversed, according to the Center on Budget and Policy Priorities.