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New JEC Report Shows Strong Wage Growth in 2021, Federal Policy Key to Supporting Further Gains

Washington, D.C.—Today, the Joint Economic Committee (JEC) released a new analysis of wage data that shows workers saw their earnings rise 4.5% in 2021, the fastest pace of growth in almost four decades.

According to recent data, gains were particularly strong for job switchers and low-income workers. Despite inflation, many workers are seeing real wage gains, a reflection of strong consumer demand for both goods and services. Strong demand for workers improves workers’ bargaining power and their wages. 

Among the report’s key findings:
  • Over the last 12 months, median wages for the lowest-income workers increased an average of 6.1%.
  • Workers who changed jobs saw their wages rise 5.3% on average, versus workers who stayed in the same job, who received a 4% increase over the same period.
  • Even after accounting for inflation, workers in trade, transportation and utilities, wholesale trade, retail trade and leisure and hospitality have all experienced raises since December 2019.
  • The Biden administration’s $15 minimum wage for federal contractors is raising the wages of over 300,000 workers, and the Labor Department is lifting wages for over 11 million tipped workers and protecting them from being underpaid for their work. 
There are indications that strong demand for workers will continue, and federal policies can help ensure further wage growth in 2022 and beyond. Congressional action, like passing the bipartisan Infrastructure Investment and Jobs Act, and actions by the Biden administration, including ensuring that workers receive all of the wages that they are earn, raising the minimum wages for federal contractors and enforcing international trade agreements for the benefit of American workers, are all policies that put U.S. workers on the path to continued wage growth.
“After decades of stagnating wages among lower- and middle-income workers, strong wage gains in 2021 are helping workers and families meet their needs and thrive in our economy,” said JEC Chairman Don Beyer. “After weathering the worst of the coronavirus recession, these wage gains are an indication of increased worker bargaining power and reflect progress toward ensuring workers are able to benefit from economic growth. This is how we, as a nation, move forward and advance an economy that works for all—not just the wealthy few.
“Yet, we know that inflation caused by the pandemic and exacerbated by Putin’s price hikes are depriving workers and families of the full benefits of our strong recovery. The Infrastructure Investment and Jobs Act was a down payment to address decades of underinvestment in our infrastructure, bolster supply chains and drive future economic growth. With the bipartisan competition bills, we have an opportunity to lower out-of-pocket costs for workers and families, spur job creation and promote U.S. competitiveness now and for generations to come.”

Read the full analysis and the accompanying fact sheet.