Shawn PhillipsNov 24, 2022
Arin Dube
Wage inequality fell over the last two and half years. And compared to early 2020, real wages are still higher for the bottom 40% of the workforce (accounting for demographic composition), in spite of high inflation rate over the past year and half.
Nov 24, 2022 at 2:40amWeb
Show threadArin DubeNov 24, 2022
This is an update from past evidence through June 2022.
Show threadArin DubeNov 24, 2022
BTW, accounting for regionally different price inflation does not materially affect this conclusion about wage compression and rise in real wages at the bottom.
Show threadArin DubeNov 24, 2022
Correction: y-axis title should say "Cumulative" and not "Annualized"
Show threadDavid Ubilava Nov 24, 2022
@arindube You can even edit that, I believe :)
Show threadJohn McLarenNov 24, 2022
@arindube this is very striking. Clarification question: you aren’t using longitudinal data, correct? So I can’t be sure the 10th-percentile person two years ago in the data is the same as the 10th-percentile person now, correct?
Show threadArin DubeNov 24, 2022
@johnmclaren Hi yes this is cross-sectional, re-weighting to keep demographics constant.
Show threadJohn McLarenNov 24, 2022
@arindube thanks. So I am guessing that the change we are seeing is mainly the consequence of the tight labor market. It’s encouraging that real incomes on the lower end appear to be increasing.
Show threadJohn McLarenNov 24, 2022
@arindube CPS?
Show threadArin DubeNov 24, 2022
@johnmclaren Yes!
Show threadThiemo FetzerNov 24, 2022
@arindube the world is starting to heal but for godawful reasons
Show threadSean GNov 24, 2022
@arindube interesting. What’s the source?
Show threadArin DubeNov 24, 2022
@bragi our analysis of CPS household data
Show threadMicah PollakNov 24, 2022
@arindube What data are you using for hourly earnings percentile?
Show threadArin DubeNov 24, 2022
@pollak CPS