Many workers received their largest pay increases between 2019 and last year, but they are struggling to cover the inflated costs of basic expenses.
Employers grappling with a nationwide labor shortage gave low-wage workers the largest pay increases in most states between 2019 and last year.
Many states have raised minimum wages in recent years, with more increases coming this year. But low-wage workers got significant raises even in states that use the federal minimum wage of $7.25 an hour. Nationwide, gains in pay for low-wage jobs have reached historic proportions, according to an Economic Policy Institute report in March. Compensation for the lowest-paid jobs rose 9% between 2019 and 2022, adjusted for inflation. That’s much higher than the 4.9% for high-wage jobs and 2.4% for middle-wage jobs. And it was the biggest bounce for low-wage workers since at least 1979, according to the report.
However, research from the Economic Policy Institute and other groups shows a continuation of the decadeslong trend of low-wage workers falling behind as rising costs outpace their incomes. “You see people getting paid a decent wage and then you realize it’s really expensive to live there. It’s a big factor even with the higher pay recently for people in low-wage jobs,” said Stephanie Hoopes, director of the ALICE team that compiled the statistics as a more realistic yardstick of families’ economic well-being.
Pay like that is a step up from fast food and retail jobs for a high school graduate, but not enough to pay for housing for a family in Indiana, said Rachel Blakeman, director of Purdue University’s Community Research Institute. And, she said, such jobs are always subject to layoffs and replacement by new technology.
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