{"id":99999,"date":"2023-04-20T07:36:00","date_gmt":"2023-04-20T11:36:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=99999"},"modified":"2023-04-20T14:05:58","modified_gmt":"2023-04-20T18:05:58","slug":"2023-salary-increase","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/2023-salary-increase\/","title":{"rendered":"Will the 2023 Salary Increase for Low-Wage Jobs Continue?"},"content":{"rendered":"\n<p>What\u2019s behind the 2023 salary increase in low-wage jobs in the US? Will wages of America\u2019s lowest-paid workers continue to rise?<\/p>\n\n\n\n<p>For four decades, the gap between America\u2019s lowest- and highest-paid workers grew. Then came the Covid-19 pandemic, which hit the \u201creset\u201d button for low-wage workers and <a href=\"https:\/\/fortune.com\/2023\/03\/17\/wage-gap-shrinks-pandemic-economy-workers\/\" target=\"_blank\" rel=\"noreferrer noopener\">reversed one-quarter of that gap<\/a>.&nbsp;<\/p>\n\n\n\n<p>Let&#8217;s take a look at what caused the 2023 wage increase and if it&#8217;s expected to continue.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-a-boost-for-america-s-lowest-wage-earners\"><strong>A Boost for America\u2019s Lowest-Wage Earners<\/strong><\/h2>\n\n\n\n<p>Although the pandemic brutalized the US economy and businesses, it came with one surprising upside: <strong>A 2019-2023 wage increase for America\u2019s lowest-paid workers<\/strong>.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"https:\/\/www.investopedia.com\/terms\/r\/realincome.asp\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Real income<\/strong><\/a><strong> for the country\u2019s lowest-paid workers <\/strong><a href=\"https:\/\/www.epi.org\/publication\/swa-wages-2022\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>grew by 9%<\/strong><\/a>\u201410% faster than in any recovery since 1979 and faster than any other group except the country\u2019s highest-paid workers.&nbsp;&nbsp;<\/li><li><strong>Wages of the lowest-paid workers <\/strong><a href=\"https:\/\/www.nber.org\/papers\/w31010?utm_campaign=ntwh&amp;utm_medium=email&amp;utm_source=ntwg23\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>rose<\/strong><\/a><strong> as those of the highest-paid fell<\/strong>; wages of the least educated grew more than those of the most educated; and wages of Black and Hispanic workers increased as those of non-Hispanic whites decreased.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-why-the-gains\"><strong>Why the Gains?&nbsp;<\/strong><\/h3>\n\n\n\n<p>Experts attribute the pay surge to three interrelated factors stemming from the pandemic:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"https:\/\/www.cbsnews.com\/news\/wages-surged-lowest-paid-americans-pandemic-covid-19\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Layoffs<\/strong><\/a>. When the pandemic hit, many companies employing large numbers of low-wage workers (restaurants, hotels, child care centers) closed, leaving large numbers of workers looking for work.<strong> Workers typically <\/strong><a href=\"https:\/\/www.theatlantic.com\/ideas\/archive\/2023\/03\/wage-growth-income-inequality-labor-market\/673277\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>command better salaries<\/strong><\/a><strong> when they leave jobs than if they stay put<\/strong>\u2014and <strong>many workers who lost jobs at the start of the pandemic ended up finding <\/strong><a href=\"https:\/\/www.cbsnews.com\/news\/wages-surged-lowest-paid-americans-pandemic-covid-19\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>better paying ones<\/strong><\/a>.&nbsp;<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Government support<\/strong>. The federal government created a <a href=\"https:\/\/www.cbsnews.com\/news\/wages-surged-lowest-paid-americans-pandemic-covid-19\/\" target=\"_blank\" rel=\"noreferrer noopener\">financial safety net<\/a> to protect the country\u2019s most financially vulnerable that included unemployment benefits, enhanced tax credits, and rental assistance. <strong>The financial cushion gave America\u2019s lowest-wage workers more flexibility to be selective while hunting for work and hold out for better-paying jobs<\/strong>.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"https:\/\/fortune.com\/2023\/03\/17\/wage-gap-shrinks-pandemic-economy-workers\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Industry resurgence<\/strong><\/a>. As the pandemic waned, industries that typically hire low-wage workers (restaurants, tourism), roared back to life, creating a new demand for labor. Suddenly, <strong>low-wage earners had more work opportunities and an unprecedented ability to jump between jobs\u2014forcing employers to raise wages to attract workers and compete with rivals<\/strong>.&nbsp;<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-low-wage-workers-future-okay-but-not-great\"><strong>Low-Wage Workers\u2019 Future: Okay, But Not Great<\/strong><\/h3>\n\n\n\n<p>Experts say that America\u2019s lowest-wage earners are in a more powerful position today than in pre-pandemic years, but that<strong> their baseline wages were so low to start with (just <\/strong><a href=\"https:\/\/www.cbsnews.com\/news\/wages-surged-lowest-paid-americans-pandemic-covid-19\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>$26,100 annually<\/strong><\/a><strong> for the lowest-paid 10% of workers) that many had difficulty making ends meet<\/strong>. So, even with recent gains, the working poor could be in for a rougher road ahead, particularly given the precarious financial forecast.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>The pay surge appears to be slowing<\/strong>. Fewer low-wage workers are seeking out new jobs than during the pandemic, interest rates are climbing, and a <a href=\"https:\/\/shortform.com\/app\/article\/how-to-weather-a-recession-if-youre-not-wealthy-shortform-explainers-shortform?sf_source=businessnewsletter\" target=\"_blank\" rel=\"noreferrer noopener\">potential recession looms<\/a>\u2014which could hurt the lowest-paid workers the most.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"https:\/\/www.theatlantic.com\/ideas\/archive\/2023\/03\/wage-growth-income-inequality-labor-market\/673277\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Programs<\/strong><\/a><strong> that allowed workers to accrue savings over the pandemic are at their end <\/strong>(unemployment insurance, the child tax credit, and stimulus checks).&nbsp;<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Not all lowest-income workers have fared equally well<\/strong>. Of those with a high-school diploma or less, <a href=\"https:\/\/www.wsj.com\/articles\/low-wage-workers-climb-the-earnings-ladder-20acd8af\" target=\"_blank\" rel=\"noreferrer noopener\">workers under 40<\/a> have seen the greatest wage gains, likely because younger workers change jobs more frequently than older workers. As a result, <strong>older, less educated workers are more likely to be left behind\u2014stuck with lower salaries so long as they stay put.<\/strong><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-s-next\"><strong>What\u2019s Next&nbsp;<\/strong><\/h3>\n\n\n\n<p>Experts say that US leaders should do more to bolster recent gains of America\u2019s lowest-paid workers, as the <strong>White House did when it called for a <\/strong><a href=\"https:\/\/www.theatlantic.com\/ideas\/archive\/2023\/03\/wage-growth-income-inequality-labor-market\/673277\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>ban of non-compete agreements<\/strong><\/a><strong> and pushed to increase unionization rates<\/strong>. Additional steps they recommend the Biden administration take to support these workers include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Increase housing stock <\/strong>so people can move to get better paying jobs.<\/li><li><strong>Decrease corporate concentration<\/strong> so workers have greater choice between employers, which could help raise wages.&nbsp;<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>What\u2019s behind the 2023 salary increase in low-wage jobs in the US? Will wages of America\u2019s lowest-paid workers continue to rise? For four decades, the gap between America\u2019s lowest- and highest-paid workers grew. Then came the Covid-19 pandemic, which hit the \u201creset\u201d button for low-wage workers and reversed one-quarter of that gap.&nbsp; Let&#8217;s take a look at what caused the 2023 wage increase and if it&#8217;s expected to continue.<\/p>\n","protected":false},"author":8,"featured_media":100004,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81,24,30],"tags":[727],"class_list":["post-99999","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-society","category-work","tag-articles","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Will the 2023 Salary Increase for Low-Wage Jobs Continue? - Shortform Books<\/title>\n<meta name=\"description\" content=\"From 2019-2023, low-wage earners found themselves taking in more pay than ever before. 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