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From the Blog Wolf Street

“Negative Growth” of Real Wages is Normal for Much of the Workforce, and Getting Worse: New York Fed

In their analysis, the authors found a common pattern: Wages increase sharply early in the work life, but as workers age, wage growth begins to slow down. There are also variances based on educational attainment, which they separated into five cohorts: Master’s or higher, Bachelor’s, some college, high school diploma, and less than high school.

The chart below shows the percentage change of real wages (left, y-axis) as these men aged (horizontal, x-axis). As young adults, their wages soared by up to 10% a year. Then the rate of growth fell off sharply. When the men in this cohort turned 40 in the 1990s, wage growth disappeared. By around the year 2000, the real wage peak in the US, when the oldest men in this cohort turned 50, wages had begun to decline for most of them. By the time these men were in the mid-50s, their wages across the board were heading south – and for many of them, rapidly.

Real Wage Growth for White Males Born in the 1950's

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