Good News for Low Wage Workers

The Atlanta Federal Reserve Bank has released data showing that the bottom 25% of workers are seeing faster wage raises:

Source: Atlanta Fed

This is presumably tracked so closely, as the nation has increasingly squeaked the wheel of low minimum wage in recent years. It appears as though the grease may be working. I should mention that these gains are in part due to state legislature raising minimum wage, as well as the historically low unemployment numbers.

I do think this is cause to celebrate, but its also important to keep in mind that CPI was around 2% between 2018-2019. If inflation targeting by the fed does continue to achieve their target goal of 2% for a few more years, however, then these gains by the bottom 25% can gain real traction.

I expect that this trend will continue for bottom quartile wages, as well as upper 10% wages. The “hollowing out” of the middle class, I think, will continue through the next few policy cycles.

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