Pay for low-wage workers grew ‘tremendously fast’ in the last 3 years—but experts don’t think it’ll last


Low-wage workers have experienced significant wage increases over the past three years, with real wages increasing by 9% between 2019 and 2022 for workers in the 10th percentile. This is the largest hike in decades, despite the economic downturn caused by the pandemic. Elise Gould, a senior economist at the Economic Policy Institute, highlights that low-wage workers attained more financial stability due to government-issued relief measures, including enhanced and extended unemployment benefits, child tax credits, and economic impact payments. 

As a result, they were not as desperate to take any job offer that came their way because they had more freedom and financial security. In addition, the historically low unemployment rates in the past year have caused companies to raise wages and offer better incentives as they compete for workers.

The smaller pool of applicants for low-wage jobs also gave workers remaining more leverage in the job market. However, experts do not expect these wage gains to continue in the near future due to the slowdown in job growth, which means that there will be less competition for workers. While current wages will likely not decrease, any gains may be eaten up by inflation, with $12.57 per hour already not covering the cost of living for most Americans.

On average, the lowest living wage for a single person with no dependents in the U.S. is between $15 and $16 per hour, according to MIT’s Living Wage Calculator.

The situation is “better than it was,” says Gould. But “it’s still not great.”

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