Order Code RL33835 Real Earnings, Health Insurance and Pension Coverage, and the Distribution of Earnings, 1979-2007 Updated October 6, 2008 Gerald Mayer Analyst in Labor Policy Domestic Social Policy Division Real Earnings, Health Insurance and Pension Coverage, and the Distribution of Earnings, 1979-2007 Summary From 1979 to 2007, there were differences between men and women in the level and growth in real earnings and in employment-based health insurance and pension coverage. Earnings and benefit coverage also differed between persons who work full-time, year-round and all working persons. All Workers. From 1979 to 2007, average real weekly earnings for all workers increased by 25.9%. Earnings increased at all earnings levels, with workers at the 95th percentile receiving the largest increase (39.4%). The earnings gap between men and women narrowed. The earnings of lower- and middle-wage men (i.e., at the 20th, 40th, and 60th percentiles) were relatively unchanged, but the earnings of women increased at all earnings levels. Inequality increased from 1979 to 2007. The top 5% of earners gained a larger share of earnings; other workers received a smaller share. Workers with higher earnings are more likely to have employment-based health insurance and pension coverage. From 1979 to 2007, participation in a pension plan increased for lower-wage workers, but decreased for higher-wage workers. The increase among lower-wage workers was due entirely to greater participation among women. From 1987 to 2007, health insurance coverage fell for workers at all earnings levels. The decline was greatest among lower-wage workers (i.e., at the 1st quintile). Among middle-wage workers, (i.e., at the 2nd, 3rd, and 4th quintiles), the decline in coverage was greater for men than women. In brief, from 1979 to 2007, the real weekly earnings of lower- and middle-wage men were relatively unchanged, and they lost health insurance coverage and most lost pension coverage. Among lower-and middle-wage women, real weekly earnings and pension participation improved, but they lost health insurance coverage. Full-Time, Year-Round Workers. From 1979 to 2007, the real weekly earnings of full-time, year-round workers rose by 13.7%. Earnings increased at all earnings levels, with the largest increase going to workers at the 95th percentile (28.8%). The earnings gap between men and women who work full-time, year-round narrowed. The earnings of men at the 20th and 40th percentiles fell, while the earnings of women increased at all earnings levels. Inequality increased, as the highest paid workers (i.e., top quintile) gained a larger share of earnings. For workers employed full-time, year-round, health insurance coverage fell at all earnings levels from 1987 to 2007. The decline in coverage was greatest for lower- and middle-wage workers and greater for lower- and middle-wage men than women. Except for the highest earning workers (i.e., top 5%), pension coverage fell at all earnings levels. Among lower- and middle-wage workers, pension coverage declined among men but was relatively unchanged among women. Thus, lower-wage men who worked full-time, year-round experienced both a decline in real earnings and lower pension and health insurance coverage. The real earnings of lower-wage women improved, but their pension coverage was unchanged and they lost health insurance coverage. This report will be updated periodically. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Organization of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Definition of Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Summary of Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 All Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Full-Time, Year-Round Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Policies to Increase Real Earnings or Reduce Inequality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Real Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Economic Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Inequality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Indirect Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Direct Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Tradeoff with Economic Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Macroeconomic Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 The Trend in Real Weekly Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 All Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Full-Time, Year-Round Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Fringe Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Employment-Based Health Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 All Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Full-Time, Year-Round Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Employer- or Union-Provided Pension Plans . . . . . . . . . . . . . . . . . . . . . . . 19 All Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Full-Time, Year-Round Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 The Distribution of Weekly Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Topcoded Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Gini Coefficient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 All Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Full-Time, Year-Round Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 The Share of Total Weekly Earnings by Quintile . . . . . . . . . . . . . . . . . . . . 26 All Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Full-Time, Year-Round Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Reasons for Changes in the Share of Total Weekly Earnings by Quintile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Appendix: Measures of Inequality, Data, and Methodology . . . . . . . . . . . . . . . . 30 Measures of Inequality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Gini Coefficient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Share of Total Earnings by Quintile . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Data Source and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 CPI-U-RS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Topcoded Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Confidence Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Data Used in Text and Graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 List of Figures Figure 1. Percentage of Full-Time Workers and Full-Time, Year-Round Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Figure 2. Real Weekly Earnings, All Workers, 1979-2007 . . . . . . . . . . . . . . . . 10 Figure 3. Real Weekly Earnings, All Male Workers, 1979-2007 . . . . . . . . . . . . 12 Figure 4. Real Weekly Earnings, All Female Workers, 1979-2007 . . . . . . . . . . 12 Figure 5. Real Weekly Earnings, Full-Time, Year-Round Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Figure 6. Real Weekly Earnings, Male Full-Time, Year-Round Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Figure 7. Real Weekly Earnings, Female Full-Time, Year-Round Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Figure 8. Employment-Based Health Insurance Coverage, All Workers, By Quintile, 1987-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Figure 9. Employment-Based Health Insurance Coverage, Full-Time, Year-Round Workers, By Quintile, 1987-2007 . . . . . . . . . . . . . . . . . . . . . . 19 Figure 10. Participation in an Employer- or Union-Provided Pension Plan, All Workers, By Quintile, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Figure 11. Participation in an Employer- or Union- Provided Pension Plan, Full-Time, Year-Round Workers, By Quintile, 1979-2007 . . . . . . . . . . . . . 22 Figure 12. Gini Coefficient, All Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . 25 Figure 13. Gini Coefficient, Full-Time, Year-Round Workers, 1979-2007 . . . . 26 Figure 14. Share of Total Weekly Earnings by Quintile, All Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Figure 15. Share of Total Weekly Earnings by Quintile, Full-Time, Year-Round Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Figure 16. Illustration of Lorenz Curves and Gini Coefficients for Two Groups of Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 List of Tables Table 1. The Trend in Real Weekly Earnings: All Workers, 1979-2007 . . . . . 34 Table 2. The Trend in Real Weekly Earnings: Full-Time, Year-Round Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Table 3. Employment-Based Health Insurance Coverage, All Workers by Quintile, 1987-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Table 4. Employment-Based Health Insurance Coverage, Full-Time, Year-Round Workers, by Quintile, 1987-2007 . . . . . . . . . . . . . 40 Table 5. Employer- or Union-Provided Pension Coverage, All Workers, by Quintile, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Table 6. Employer- or Union-Provided Pension Coverage, Full-Time, Year-Round Workers, by Quintile, 1979-2007 . . . . . . . . . . . . . 44 Table 7. Gini Coefficients for All Workers and for Full-Time, Year-Round Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Table 8. Share of Total Weekly Earnings by Quintile, All Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Table 9. Share of Total Weekly Earnings by Quintile, Full-Time, Year-Round Workers, 1979-2007 . . . . . . . . . . . . . . . . . . . . . . . 50 Real Earnings, Health Insurance and Pension Coverage, and the Distribution of Earnings, 1979-2007 Introduction Real earnings and the distribution of earnings are indicators of a nation’s economic well-being. Changes in the level of real earnings (i.e., actual earnings adjusted for inflation) show how a worker’s buying power has risen or fallen over time. Changes in the distribution of earnings show how the buying power of different workers has changed over time. Real earnings and the distribution of earnings affect several public policy issues. When wages rise with productivity, increased earnings can expand the Social Security taxable wage base, which can reduce the future need for higher Social Security payroll taxes or cuts in benefits. Higher earnings can also help pay for future Medicare benefits. Conversely, lower earnings can make it more difficult to finance the Social Security and Medicare programs. The level of real earnings can affect the national poverty rate and, therefore, federal spending on welfare and assistance for food, housing, healthcare, and energy. The federal minimum wage can affect the real earnings of lower-wage workers, as well as the overall distribution of earnings. In large part, real earnings depend on the amount of investment per worker — in the form of both human capital (e.g., education and healthcare) and physical capital (e.g., computers and other equipment). Investment depends on personal, business, and government saving. Thus, federal budget deficits or surpluses can affect the national saving rate and the amount of investment per worker. Government spending and tax policy can also affect earnings. Federal support for research and development can affect real earnings through the development of new goods and services and more productive technologies. Tax policy can affect decisions to save and invest, as well as the aftertax distribution of earnings. Policies that affect personal saving and the availability of private pension benefits can impact retirement income and reliance on Social Security benefits. Policies that influence the availability of private health insurance can affect federal spending on healthcare. Rules on immigration can affect both real earnings and the distribution of earnings. An increased supply of unskilled foreign workers can lower the wages of less-skilled U.S. workers and increase inequality. Conversely, an increased supply of skilled foreign workers can lower the wages of skilled American workers and reduce inequality. Similarly, trade policy can affect both real earnings and the CRS-2 distribution of earnings. Increased imports from low-wage countries can raise the living standards of U.S. households but affect the wages of domestic workers who produce competing goods and services. Increased exports of goods produced in the United States can raise the wages of American workers. Finally, differences in earnings among racial or ethnic groups or extremes in inequality can affect popular support for major social, political, and economic institutions. Organization of Report This report examines the trends in real weekly earnings and the distribution of weekly earnings in the United States from 1979 to 2007. The report provides separate analyses for men and women.1 The report begins with a definition of earnings and a summary of the findings in the report. Next, the paper discusses broad policies to increase real earnings or reduce inequality. The final section of the report provides a detailed summary of the findings. The report analyzes individual earnings. A study of individual income or of family earnings or income may reach different conclusions.2 The report does not review research on the causes of changes in real earnings or inequality.3 The Definition of Earnings The results of an analysis of real earnings and the distribution of earnings are affected by the definition of earnings, whose earnings are studied (e.g., all workers, full-time workers, prime-age workers, or others), the measure of inequality, and the time period studied. Earnings are payments that individuals receive for their labor services. Individuals may be paid for a period of time worked (e.g., an hourly wage or weekly salary) or the quantity of goods or services produced (e.g., a piece rate). Earnings 1 In addition to real earnings and the distribution of earnings, economists also study earnings mobility, or how the earnings of a given sample of workers change over time. Because of mobility, the distribution of lifetime earnings may differ from the distribution of annual or weekly earnings. 2 3 Earnings account for the largest share of individual and family income. Hearings during the first session of the 110th Congress examined the trends and causes of inequality. See U.S. Congress, House, Committee on Ways and Means, Hearing on the Economy, January 23, 2007, available at [http://waysandmeans.house.gov]; U.S. Congress, House, Committee on Education and Labor, Strengthening America’s Middle Class: Evaluating the Economic Squeeze on America’s Families, January 31, 2007, available at [http://edworkforce.house.gov]; U.S. Congress, House, Committee on Ways and Means, The Challenges Facing Middle-Class Families, January 31, 2007, available at [http://waysandmeans.house.gov]; and U.S. Congress, Joint Economic Committee, Ensuring Our Economic Future by Promoting Middle-Class Prosperity, January 31, 2007, available at [http://jec.senate.gov]. CRS-3 may be defined as cash wages or as total compensation. The latter consists of cash wages plus fringe benefits such as employer-provided health insurance, employer contributions to a retirement plan, and paid sick leave and vacations. The results of an analysis of individual earnings would differ from a study of individual compensation or individual income or of family earnings or income.4 Many individuals and families receive cash or in-kind benefits from sources other than work (e.g., interest, dividends, rent, cash welfare assistance, refundable tax credits, or in-kind benefits such as food, housing, healthcare, or energy assistance).5 Some families have more wage earners than other families. This report analyzes individual weekly earnings, where earnings consist of cash wages before taxes or other deductions. Individual earnings consist of total annual earnings from all jobs. Weekly earnings are annual earnings divided by the number of weeks worked. The analysis includes wage and salary workers and self-employed workers ages 16 and older. Because there are differences in the labor market characteristics of men and women, the earnings of men and women are analyzed separately.6 The analysis uses data from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). The CPS is a household survey conducted by the Census Bureau for the Bureau of Labor Statistics (BLS). The annual supplement asks workers how much they earned the previous year. Thus, the 2008 supplement collected earnings information for 2007. The Appendix includes a fuller explanation of the data and methodology used in this report. Finally, the report analyzes the earnings of two groups of workers: (1) all workers and (2) workers employed full-time, year-round. “All” workers include persons employed either full-time or part-time as well as workers who worked either part of the year or all year. Full-time workers are persons who work 35 or more hours a week. Year-round workers are persons who work 50 or more weeks a year. 4 The distribution of earnings may change even though the distribution of total compensation does not change; e.g., if workers choose to receive a greater or smaller share of compensation as wages or if employers raise or lower their contributions for health insurance or retirement benefits. For analyses of the distribution of household income, see CRS Report RS20811, The Distribution of Income, by Brian W. Cashell; CRS Report RL32639, Inequality in the Distribution of Income: Trends and International Comparisons, by Brian W. Cashell; and U.S. Department of Commerce, Bureau of the Census, Income, Poverty, and Health Insurance Coverage in the United States: 2005, P60-231, August 2006, available at [http://www.census.gov/prod/2006pubs/p60-231.pdf]. 5 The results of an analysis of the distribution of earnings would differ from an analysis of the distribution of income if income from transfer payments or from savings and investments rise or fall. In addition, a change in nonlabor income may affect earnings (i.e., decisions to work or how much to work). 6 In general, women tend to work fewer hours per week than men, spend less time in the labor force, and enter and leave the labor force more often than men. The distribution of women by occupation and industry also differs from men. See CRS Report 98-278, The Gender Wage Gap and Pay Equity: Is Comparable Worth the Next Step?, by Linda Levine. CRS-4 Analyzing the earnings of full-time, year-round workers helps control for changes in hours worked per week, temporary and seasonal employment, and spells of unemployment. From 1979 to 2007, the percentage of workers employed fulltime, year-round increased by 12.2 percentage points (from 56.4% in 1979 to 68.6% in 2007). (See Figure 1.) The percentage of workers employed full-time and the percentage of workers employed both full-time and year-round tend to dip during recessions. From 1979 to 2007, there were recessions from January to July 1980, July 1981 to November 1982, July 1990 to March 1991, and March to November 2001.7 Figure 1. Percentage of Full-Time Workers and Full-Time, Year-Round Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). 7 National Bureau of Economic Research (NBER), Business Cycle Dates and Contractions, available at [http://www.nber.org/cycles.html]. For a discussion of the economic recovery following the 2001 recession, see CRS Report RL32047, The ‘Jobless Recovery’ From the 2001 Recession: A Comparison to Earlier Recoveries and Possible Explanations, by Marc Labonte and Linda Levine. CRS-5 Summary of Findings All Workers ! From 1979 to 2007, the average real weekly earnings (i.e., earnings adjusted for inflation) of all workers increased by 25.9%. Earnings increased for workers at all percentiles.8 The increase was greatest for workers at the 95th percentile (39.4%). ! At all earnings levels, from 1979 to 2007, men earned more than women. But, during the 28-year period, the earnings of women increased more than the earnings of men. Thus, the earnings gap between men and women narrowed over the period. ! From 1979 to 2007, the increase in earnings among lower- and middle-wage workers (i.e., workers at the 20th, 40th, and 60th percentiles), was due mainly to higher earnings among women. The earnings of men at these percentiles were relatively unchanged (up by 3.6%, down by 2.9%, and up by 3.4%, respectively). But, the earnings of women at these percentiles increased by 43.5%, 37.8%, and 44.9%, respectively. ! The CPS has consistent information on health insurance coverage from 1987 to the present. Workers with higher earnings are more likely to have employment-based health insurance coverage. However, from 1987 to 2007, the percentage of workers with employment-based health insurance coverage declined at all quintiles.9 ! From 1987 to 2007, the decline in health insurance coverage was greatest for lower-wage workers (i.e., workers at the first quintile). Coverage declined among both men and women. But, among middle-wage workers (i.e., workers at the second, third, and fourth quintiles), the decline in coverage was greater for men than women. ! Workers with higher earnings are more likely than lower-wage workers to participate in an employer or union provided pension plan. Relative to higher-wage workers, however, participation among lower-wage workers in a pension plan improved from 1979 to 2007. The improved participation among lower-wage workers was due entirely to increased participation among women. 8 If workers are ranked from lowest to highest paid, workers at the 20th percentile earn more than 20% of workers, workers at the 40th percentile earn more than 40% of workers, and so on. 9 If workers are ranked from lowest to highest paid and then divided into five equal-size groups, each group is a quintile. CRS-6 ! From 1979 to 2007, participation among middle-wage men in an employer-based pension plan fell, but increased among middle-wage women. ! As measured by the Gini coefficient, inequality increased among all workers over the period from 1979 to 2007. Inequality increased among both men and women. From 1979 to 2007, periods of rising inequality were followed by periods of falling inequality. Inequality fell from 2005 to 2007. ! Inequality increased more among men and women, when analyzed separately, than among men and women analyzed together. Although overall inequality declined from 2005 to 2007, among women it increased from 2005 to 2006 and then declined from 2006 to 2007. ! From 1979 to 2007, the rise in inequality was due mainly to the growth in the share of total weekly earnings received by the top 5% of earners and the decline in the share of earnings received by other workers. From 1979 to 2007, the share of total earnings received by the top 5% of earners increased by 2.6 percentage points. During the period, when inequality increased it was generally because the top 5% of earners received a larger share of earnings, while other workers received a smaller share. Conversely, when inequality declined, it was generally because the top 5% of workers received a smaller share of earnings and other workers received a larger share. Full-Time, Year-Round Workers ! From 1979 to 2007, the average real weekly earnings of full-time, year-round workers increased by 13.7%. Earnings increased at all earnings levels. The largest increase, 28.8%, occurred among workers at the 95th percentile. ! During the 28-year period, the earnings of lower-wage men (i.e., men at the 20th and 40th percentiles) employed full-time, year-round fell by 9.7% and 6.9%, respectively. Conversely, the earnings of women at the 20th and 40th percentiles increased by 7.3% and 25.2%, respectively. ! At all earnings levels, the earnings of women increased more than the earnings of men. Thus, as was the case with the category of all workers, the gap narrowed between the earnings of men and women employed full-time, year-round. ! Higher earning full-time, year-round workers are more likely than lower-wage workers to be covered by an employment-based health insurance plan. Nevertheless, from 1987 to 2007, health insurance coverage declined at all earnings levels. The decline in coverage was greatest for lower-wage workers. CRS-7 ! During the 20-year period from 1987 to 2007, health insurance coverage declined among both men and women employed full-time, year-round. But, the decrease was greater for lower- and middlewage men (i.e., men at the first four quintiles) than among lowerand middle-wage women. ! Higher-wage full-time, year-round workers are more likely than lower-wage workers to participate in an employer or union provided pension plan. However, except for the top 5% of earners, participation declined at all earnings levels from 1979 to 2006. ! From 1979 to 2007, participation by lower- and middle-wage men in an employment-based pension plan declined more than among lower- and middle-wage women. At the lowest quintile, participation among men fell by 8.7 percentage points, compared to a 3.3 percentage point decline among women. Participation fell among men at the second, third, and fourth quintiles, but was relatively unchanged among women. ! The distribution of earnings among workers employed full-time, year-round is more equal than the distribution of earnings among all workers. Nevertheless, from 1979 to 2007, inequality increased among full-time, year-round workers. Periods of greater equality were followed by periods of rising inequality. From 2006 to 2007, the distribution of earnings became more equal. ! Inequality among women employed full-time, year-round is significantly lower than inequality among men. But inequality among men and women, analyzed separately, increased more from 1979 to 2007 than inequality among men and women combined. ! Over the period from 1979 to 2007, the top quintile of earners received a larger share of total weekly earnings, while the first four quintiles received a smaller share. From 1979 to 2007, the share of earnings received by the top 5% of earners increased by 1.5 percentage points. Similar to the pattern among all workers, when inequality increased among full-time, year-round workers, the share of earnings received by the bottom four quintiles generally fell, while the share of earnings received by the top quintile — especially the top 5% — generally rose. Conversely, when equality improved, the opposite occurred. CRS-8 Policies to Increase Real Earnings or Reduce Inequality A variety of policies are available to increase real earnings or reduce earnings inequality. Policies to increase real earnings may differ from policies to reduce inequality. In some cases, the policies may conflict. Some of the policies may have mainly short-term effects. Other policies may require a longer-term commitment. Real Earnings Productivity. Real earnings rise with increased productivity. Policies to increase productivity may include plans to raise both private and public saving, increase capital investment per worker, expand investment in human capital (e.g., education, training, and healthcare), and encourage the development of technology. Technological innovation may include improved equipment, the introduction of new products, or improved methods of production, transportation, or communication.10 Economic Efficiency. Another way to increase real earnings is to improve economic efficiency. According to standard economic theory, competitive markets generally result in the most efficient allocation of resources, where resources consist of individuals with different skills, capital goods (e.g., computers, machinery, and buildings), and natural resources. A more efficient allocation of resources generally results in greater total output and consumer satisfaction. Economic efficiency can be improved through policies that provide consumers with greater access to goods and services (e.g., improved infrastructure to exchange goods and services and expanded trade) and a better allocation of labor and capital (e.g., neutral tax policies, migration, or the deregulation of labor, product, or other markets). Inequality Inequality may be reduced using either direct or indirect policies. Direct policies include income transfer programs. Indirect policies consist of plans that improve the income-producing human capital of lower-skilled workers (e.g., education, training, or healthcare). Efforts to reduce inequality may involve a tradeoff, however, with policies to improve economic efficiency. Indirect Policies. Inequality can be reduced with policies that reduce the relative supply of less-skilled labor, increase the relative supply of skilled labor, or both. Such policies may include improved investment in preschool, grade school, and high school education, better adult education, and improved access to healthcare 10 Improved technology may allow for greater outsourcing of both manufacturing and service jobs, which may or may not affect the distribution of domestic earnings. See CRS Report RL32292, Offshoring (a.k.a. Offshore Outsourcing) and Job Insecurity Among U.S. Workers, by Linda Levine and CRS Report RL32484, Foreign Outsourcing: Economic Implications and Policy Responses, by Craig K. Elwell. CRS-9 for lower income workers and their families. Inequality may also be reduced by increasing the relative supply of college-educated workers; for example, programs that lower the cost of higher education or increase educational assistance to lower income students. Some policies may be more cost effective than others. Immigration policies that allow more skilled workers, fewer unskilled workers, or both, into the country can also reduce inequality. Direct Policies. Income inequality may also be reduced through income redistribution programs. These programs include policies such as progressive taxation — including refundable tax credits like the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC). They also include in-kind transfers of food, housing, healthcare, and energy assistance. Tradeoff with Economic Efficiency. Competitive markets may allocate resources efficiently, but they may result in an unequal distribution of earnings. Thus, programs that reduce inequality may involve a tradeoff with policies to improve economic efficiency. Some economists argue that a higher minimum wage, easier union organizing rules, or more restrictive trade policies may reduce inequality. Other economists maintain that these policies may reduce total economic output and may not have a significant impact on inequality. Similarly, some economists argue that high marginal tax rates and income redistribution programs may harm economic efficiency. For example, high tax rates may discourage saving and investment. Transfer payments or other forms of nonlabor income may reduce the supply of labor (i.e., they may affect decisions to work or how much to work). Macroeconomic Policies. Fiscal and monetary policies that reduce or maintain low unemployment may also affect the distribution of earnings. During an economic expansion, an increase in the number of hours worked or the hourly wages of lower-wage workers may improve the relative earnings of lower-wage workers. Fiscal policy consists of government spending and revenue decisions. Monetary policy consists of actions by the Federal Reserve Bank that affect money supply and interest rates.11 The Trend in Real Weekly Earnings The remainder of this report provides a detailed description of the findings summarized above. This section examines the trend in real weekly earnings from 1979 to 2007. Earnings are for both wage and salary workers and self-employed workers. Nominal, or actual, earnings are adjusted for inflation using the Consumer Price Index for All Urban Consumers, adjusted to take into account the current methods for measuring changes in prices (CPI-U-RS). An explanation of this index is provided in the Appendix. This section shows the trend in real weekly earnings for workers at the 20th, 40th, 60 , 80th, and 95th percentiles. If workers are ranked from lowest to highest paid, workers at the 20th percentile earn more than 20% of workers, workers at the 40th th 11 Fiscal policy (i.e., budget surpluses or deficits) may also impact interest rates. CRS-10 percentile earn more than 40% of workers, and so on. All of the results in this section are shown using graphs. All of the data displayed in the graphs are provided in the Appendix. All Workers From 1979 to 2007, the average real weekly earnings of all employed persons increased by 25.9%. Earnings increased for workers at all percentiles. See Figure 2.12 The increase was greatest for workers at the 95th percentile. For example, for workers at the 20th percentile, earnings increased from $244 to $292 per week (or 19.5%). For workers at the 95th percentile, earnings increased from $1,587 to $2,212 a week (or 39.4%). From 2001 to 2007, the earnings of workers at the 95th percentile fell by 0.7% (from $2,228 to $2,212). Figure 2. Real Weekly Earnings, All Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). 12 Because of changes in topcoding in the CPS that affected the change in average earnings from 1992 to 1993, average earnings are not shown in Figure 2 or in the other figures in this report that show trends in real weekly earnings. Since the reported change in earnings from 1992 to 1993 cannot be separated into the effects of the change in topcoding and the actual change in earnings, in Tables 1 and 2 the percentage change in average earnings from 1979 to 2007 is the sum of the changes in average earnings from 1979 to 1992 and from 1993 to 2007. See the discussion of “Topcoded Earnings” later in this report. CRS-11 Figures 3 and 4 show two differences in the real weekly earnings of men and women. First, at each percentile, the earnings of men are greater than the earnings of women. For example, in 2007, men at the 20th percentile earned $365 a week, compared to $250 a week for women. At the 60th percentile men and women earned $900 and $635 a week, respectively. At the 95th percentile, men earned $2,653 a week, compared to $1,700 a week for women. Over the period from 1979 to 2007, average real weekly earnings increased more for women than men (50.4% and 16.7%, respectively). At all earnings levels, weekly earnings increased more among women than men. Thus, over the 28-year period, the earnings gap between men and women narrowed. At the 20th, 40th, and 60th percentiles, the increase in earnings among all workers was due almost entirely to higher earnings among women. The earnings of men at the 20th, 40th, and 60th percentiles were relatively unchanged (up by 3.6%, down by 2.9%, and up by 3.4%, respectively). But, for women at these percentiles, earnings increased by 43.5%, 37.8%, and 44.9%, respectively. (See Table 1 in the Appendix.) The narrowing of the earnings gap between men and women may have been caused by a number of factors. Women’s relative hourly wages may have increased. They may have worked more hours. Gains in educational attainment and work experience may have helped narrow the gap. More women may have entered traditionally male occupations.13 13 For more discussion on the reasons for the narrowing of the wage gap between men and women, see CRS Report 98-278, The Gender Wage Gap and Pay Equity: Is Comparable Worth the Next Step?, by Linda Levine. CRS-12 Figure 3. Real Weekly Earnings, All Male Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). Figure 4. Real Weekly Earnings, All Female Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). CRS-13 Full-Time, Year-Round Workers From 1979 to 2007, the average real weekly earnings of full-time, year-round workers increased by 13.7%. Earnings increased at all percentiles. The largest increase, 28.8%, occurred among workers at the 95th percentile. The trend in real weekly earnings of workers employed full-time, year-round differs from the pattern of earnings for all workers. ! The earnings of full-time, year-round workers are higher than the earnings of all workers. (Compare Figure 2 and Figure 5.) ! From 1979 to 2007, the earnings of workers employed full-time, year-round increased less than the earnings of all workers. For example, for full-time, year-round workers, earnings at the 20th percentile increased by 2.9% compared to an increase of 19.5% for all workers. Figure 5. Real Weekly Earnings, Full-Time, YearRound Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). ! From 1979 to 2007, the earnings of all lower-wage men were relatively unchanged, but earnings among men employed full-time, CRS-14 year-round fell. At the 20th and 40th percentiles, the earnings of all men were up by 3.6% and down by 2.9%, respectively. But, for men employed full-time, year-round, earnings fell by 9.7% and 6.9%, respectively. (From 1979 to 2007, the earnings of lower-wage women employed full-time, year-round increased, but by less than the increase in earnings among all lower-wage women.) As was the case with all workers, the average real weekly earnings of women employed full-time, year-round increased more than the earnings of men (37.7% and 9.7%, respectively). At all percentiles, the earnings of women working full-time, year-round increased more than the earnings of men. For example, compared to the decline in earnings among men at the 20th and 40th percentiles, the earnings of women increased by 7.3% and 25.2%, respectively. (Compare Figures 6 and 7.) Figure 6. Real Weekly Earnings, Male Full-Time, Year-Round Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). CRS-15 Figure 7. Real Weekly Earnings, Female FullTime, Year-Round Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). Fringe Benefits Total compensation consists of wages and fringe benefits. This section examines the trends in employment-based health insurance and pension coverage. Employment-based coverage consists of health insurance or pension plans provided by an employer or union. Workers who are not covered by an employment-based health insurance plan may purchase insurance from a private insurance company, or they may be covered by a public insurance program (e.g., Medicaid or Medicare). Workers may also contribute to an Individual Retirement Account (IRA).14 This report only takes into account employer-provided health insurance and pension plans. The report does not examine the cost of health insurance or the amount that employers contribute to employee retirement plans. For the analysis in this section, workers are divided into quintiles. Workers are first ranked from lowest to highest paid. Workers are then divided into five equalsize groups, or quintiles. The top quintile is further divided into two groups: the top 5% of earners and the top 81% to 95% of earners. 14 For information on the types of IRAs, see CRS Report RL31770, Individual Retirement Accounts and 401(k) Plans: Early Withdrawals and Required Distributions, by Patrick Purcell. CRS-16 Employment-Based Health Insurance The CPS has consistent information on employment-based health insurance coverage from 1987 to the present. However, because of changes in the survey, some of the data since 1987 are not entirely comparable. For example, in 1994 the health insurance questions in the CPS were redesigned.15 These changes resulted in higher estimates of the number of persons with employment-based health insurance. The reported change in health insurance coverage between 1993 to 1994 cannot be separated into the effects of the change in the survey questions and the actual change in coverage. Therefore, in Figure 8 and Figure 9, the period from 1987 to 2007 is separated into two subperiods: 1987 to 1993 and 1994 to 2007. Also, in this section of the report and in Table 3 and Table 4 in the Appendix, the changes in coverage from 1987 to 2007 are the sum of the percentage point changes over each of the two subperiods; that is, the sum of the percentage point change from 1987 to 1993 and the change from 1994 to 2007.16 All Workers. Four features characterize the trend in employment-based health insurance coverage from 1987 to 2007.17 ! Workers with higher earnings are more likely to have health insurance. In 2007, 84.7% of the top 5% of earners had coverage, compared to 46.8% of workers in the lowest quintile. 15 U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2006, Current Population Reports, P60-233, U.S. Govt. Print. Off., August 2007, available at [http://www.census.gov/prod/2007pubs/p60-233.pdf], p. 58. 16 Other changes in the CPS may affect the comparability of health insurance data over time. The Census Bureau has released revised data on health insurance coverage for the years 1996 to 2005. Because of these revisions, the estimated number of persons with employment-based health insurance increased slightly. This report does not take these revisions into account. Also, in 2000, the CPS added questions to verify that people who answered “no” to all questions about specific types of insurance were actually uninsured. This change also increased slightly the estimated number of persons with employment-based health insurance. Cheryl Hill Lee and Sharon M. Stern, Health Insurance Estimates from the U.S. Census Bureau: Background for a New Historical Series, U.S. Census Bureau, June 2007, at [http://www.census.gov/hhes/www/hlthins/usernote/revhlth_paper.pdf], pp. 8, 16. For additional information on health insurance issues, see CRS Report RL32237, Health Insurance: A Primer, by Bernadette Fernandez; CRS Report RL34389, Health Insurance Reform and the 110th Congress, by Jean Hearne; and CRS Report RS22735, Spending by Employers on Health Insurance: A Data Brief, by Jennifer Jenson. 17 The analysis in this report is of employment-based health insurance coverage only. It does not include coverage of self-employed persons. The self-employed may have private health insurance if they purchase an individual policy or they are covered under someone else’s policy. For more information on health insurance coverage, see CRS Report 96-891, Health Insurance Coverage: Characteristics of the Insured and Uninsured Populations in 2007, by Chris L. Peterson and April Grady. CRS-17 ! From 1987 to 2007, the percentage of workers with health insurance coverage declined at all earnings levels. Coverage declined among both men and women. ! The decline in health insurance coverage was greatest for lowerwage workers. (See Figure 8.) At the lowest quintile, the percentage of workers with health insurance fell by 9.4 percentage points, compared to a 5.2 percentage point decline for the top 5% of earners.18 At the lowest quintile, coverage fell by 8.0 percentage points among men and by 10.0 percentage points among women. ! Among middle-wage workers (i.e., workers at the second, third, and fourth quintiles), the decline in health insurance coverage was greater for men than women. Among men at the second, third, and fourth quintiles, coverage fell by 8.3, 6.1, and 8.3 percentage points, respectively. Coverage among women at these quintiles fell by 3.5, 1.3, and 2.0 percentage points, respectively. Figure 8. Employment-Based Health Insurance Coverage, All Workers, By Quintile, 1987-2007 Source: CRS analysis of data from the Current Population Survey (CPS). Note: Because of changes in the design of the health insurance questions in 1994, the percentage of workers with employment-based health insurance is separated into two subperiods: 1987-1993 and 1994-2007. 18 Unless stated otherwise, the comparisons of percentage differences or changes discussed in this report are significant at either the 95% or 90% confidence levels. See the Appendix for an explanation of confidence levels. CRS-18 During the 20-year period, employment-based health insurance coverage generally declined from 1987 to the early 1990s, increased or was relatively stable to about 2000, and then declined again from about 2000 to 2007. For example, at the second, third, and fourth quintiles, the percentage of workers with employment-based health insurance declined from 1987 to 1993, increased from 1994 to 2000, and then declined from 2000 to 2007. From 2006 to 2007, coverage among all workers at the third quintile increased by a statistically significant 1.1 percentage points. Over the same two-year period, coverage among women at the fourth quintile increased, but decreased among women at the highest quintile (i.e., at the 81st percentile and above). (See Table 3 in the Appendix.) Full-Time, Year-Round Workers. Figure 9 shows the percentage of fulltime, year-round workers with employment-based health insurance. Workers with higher earnings are more likely to be covered by employment-based health insurance. On the other hand, from 1987 to 2007, the percentage of full-time, year-round workers with employment-based health insurance declined at all earnings levels. As was the case with all workers, from 1987 to 2007, the decline in coverage was greater at both the beginning and end than in the middle of the period. From 1987 to 2007, the decline in insurance coverage was greatest for lowerwage workers. At the lowest and second quintiles, coverage declined by 9.8 and 10.5 percentage points, respectively, compared to a 4.7 percentage point decline among the top 5% of earners. During the 20-year period from 1987 to 2007, health insurance coverage declined among both men and women. But, the decrease was greater for lower- and middle-wage men (i.e., men at the first four quintiles) than for lower- and middlewage women. For example, at the lowest quintile, coverage fell by 10.7 percentage points among men, compared to a 6.9 percentage point drop among women. At the second, third, and fourth quintiles, coverage among men fell by 11.4, 9.1, and 7.8 percentage points, respectively. Among women at these quintiles, coverage fell by 8.7, 3.1, and 3.7 percentage points, respectively. (See Table 4 in the Appendix.) CRS-19 Figure 9. Employment-Based Health Insurance Coverage, Full-Time, Year-Round Workers, By Quintile, 1987-2007 Source: CRS analysis of data from the Current Population Survey (CPS). Note: Because of changes in the design of the health insurance questions in 1994, the percentage of workers with employment-based health insurance is separated into two subperiods: 1987-1993 and 1994-2007. Employer- or Union-Provided Pension Plans All Workers. Workers with higher earnings are more likely to participate in an employer or union provided pension plan. In 2007, 62.9% of the top 5% of earners were covered by such a plan, compared to 9.8% of workers in the lowest quintile. Relative to higher-wage workers, however, participation among lower-wage workers in an employer or union provided pension plan improved from 1979 to 2007.19 At the lowest quintile, participation increased by 2.4 percentage points (from 7.4% to 9.8%), but declined by 2.1 percentage points (from 64.9% to 62.9%, rounded20) among the top 5% of earners. The improved participation of lower-wage workers was due entirely to increased participation among women. At the lowest 19 The analysis in this section includes wage and salary workers in both the private and public sectors as well as self-employed workers. Public sector and self-employed workers are not covered by the Employee Retirement Income Security Act of 1974 (ERISA, P.L. 93406), which is the federal law that governs employer-provided pension plans. For more information on pension plan coverage, see CRS Report RL30122, Pension Sponsorship and Participation: Summary of Recent Trends, by Patrick Purcell. 20 Although coverage decreased by 2.1 percentage points from 1979 to 2007, coverage rounds to 64.9% in 1979 and 62.9% in 2007. CRS-20 quintile, over the 28-year period there was no change in participation among men, but a 3.4 percentage point increase (from 5.3% to 8.7%) among women. At the second quintile, participation among men fell by 4.8 percentage points (from 32.9% to 28.1%), but increased by 6.8 percentage points (from 18.0% to 24.8%) among women. (See Figure 10 and Table 5 in the Appendix.) From 1979 to 2007, participation in an employer-based pension plan among middle-wage men — that is, men at the second, third, and fourth quintiles — fell, but participation among middle-wage women increased. Among men at these quintiles, participation fell by 4.8, 8.3, and 11.8 percentage points, respectively. Participation among women increased by 6.8, 11.5, and 8.9 percentage points, respectively. Although there was some variation from year-to-year, during the period from 1979 to 2007, participation in an employer or union pension plan generally declined from the early to the late 1980s, increased from the late 1980s to about 2000, declined again from about 2000 to 2006, and increased from 2006 to 2007. From 2006 to 2007, except for workers at the lowest two quintiles, participation of employees in a pension plan increased at all earnings levels. Figure 10. Participation in an Employer- or Union-Provided Pension Plan, All Workers, By Quintile, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). CRS-21 Full-Time, Year-Round Workers. For full-time, year-round workers, the trend in participation in an employment-based pension plan differed from the trend for all workers. ! Lower-wage full-time, year-round workers were more likely than all lower-wage workers to participate in an employer or union pension plan. In 2007, at the first and second quintiles, 22.2% and 44.5% of full-time, year-round workers were participants in an employer or union pension plan, compared to 9.8% and 26.2% of all workers at these quintiles. ! Among full-time, year-round workers, except for the top 5% of earners, participation declined at all quintiles from 1979 to 2007. ! From 1979 to 2007, participation among lower- and middle-wage men declined more than among lower- and middle-wage women. At the lowest quintile, participation among men fell by 8.7 percentage points (from 28.7% to 20.0%), compared to a 3.3 percentage point drop (from 27.3% to 23.9%, rounded) among women. Among men at the second, third, and fourth quintiles, participation fell by 14.3, 13.4, and 10.0 percentage points, respectively. Participation among women at these quintiles was relatively unchanged. Similar to the trend among all workers, participation in an employment-based pension plan generally fell from the early to the late 1980s, increased from the late 1980s to about 2000, and declined again from about 2000 to 2006. Except for workers in the lowest quintile and the top 5% of workers, pension coverage increased from 2006 to 2007. (See Figure 11 and Table 6 in the Appendix.) CRS-22 Figure 11. Participation in an Employer- or UnionProvided Pension Plan, Full-Time, Year-Round Workers, By Quintile, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). The Distribution of Weekly Earnings This section examines the trend in the distribution of weekly earnings from 1979 to 2007. Different measures of inequality provide different information and can lead to different conclusions about the trend in the distribution of earnings. Most measures identify whether inequality has changed over time or whether inequality is greater among some groups of workers than among others. But some measures may not reveal how inequality has changed over time or differs among groups. This report uses two measures of inequality: the Gini coefficient and the share of total weekly earnings received by each quintile of workers. Together, the two measures show whether the distribution of earnings has changed over time and, if so, how it has changed. Topcoded Earnings To protect the confidentiality of survey participants, the CPS data available for public use have an earnings amount assigned to higher-earning workers. Over time, changes in these amounts, or topcodes, can affect the observed trend in inequality. In the CPS, total annual earnings consist of wages and salaries as well as farm and nonfarm self-employment income. Wages and salaries are further separated into CRS-23 earnings from a worker’s longest job and “other” wage and salary earnings (e.g., from another or a second job). Before 1996, each source of earnings was topcoded at the same amount. Since 1996, each source of earnings has been given a unique topcode. Currently, the top code for earnings from a worker’s longest job is $200,000. The topcode for “other” wages and salaries is $35,000. If someone’s longest job was as a wage and salary worker, but they also had earnings from self-employment, the topcode from self-employment is $50,000. If the income from self-employment is from farming, the topcode is $25,000. Before 1996, if earnings were topcoded, reported earnings were the topcoded amount. For example, for 1995, earnings were topcoded at $99,999. For anyone who earned more than $99,999, the CPS reported their earnings as $99,999. Since 1996, for workers with earnings above the topcoded amounts, reported earnings are the average of earnings for workers with similar characteristics. Average earnings are calculated for persons based on gender, race, ethnicity, and whether or not they work full-time, year-round. For 2007, earnings from a person’s longest job were topcoded at $200,000. For white males who worked full-time, year-round and who earned more than $200,000, the CPS reported average earnings of $419,969 (i.e., the average earnings of white, male, full-time, year-round workers who earned more than $200,000). The change in 1996 in the way topcoded earnings are reported (i.e., average earnings as opposed to the actual topcode amounts) can affect the observed trend in inequality. For years before 1996, several economists who were given access to internal CPS data, calculated average earnings for persons with earnings above the topcoded levels. Like average earnings above the topcoded amounts reported by the CPS since 1996, the economists calculated average earnings for persons based on gender, race, ethnicity, and whether or not they work full-time, year-round. Their results are reported in a paper published by the National Bureau of Economic Research (NBER). For consistency over the period from 1979 through 2007, this report uses average earnings above the topcoded amounts as reported by the CPS for the years 1996 and later and average earnings as published in the NBER report for the years before 1996.21 Because of continuing concerns about confidentiality and because of questions about the reliability of responses from persons who claim to have very high earnings, internal CPS data are also subject to a form of topcoding. Between 1984 and 1985, the cap on annual earnings in the internal CPS was raised from $99,999 to $250,000. Between 1992 and 1993, the cap was raised from $299,999 to $999,999.22 The large increase in 1993 had a significant effect on the average amount of earnings for the 21 Larrimore, Jeff, Richard V. Burkhauser, Shuaizhang Feng, and Laura Zayatz, Consistent Cell Means for Topcoded Incomes in the Public Use March CPS (1976-2007), National Bureau of Economic Research, Working Paper 13941, April 2008, available at [http://www.nber.org/papers/w13941], pp. 29-31, 33-36. 22 Ibid., p. 49. CRS-24 highest paid workers, which, in turn, affected the observed change in inequality from 1992 to 1993. Because of the effect of changes in the internal CPS data from 1992 to 1993, in this report the graphical representations of the Gini coefficient are separated into two periods: 1979 to 1992 and 1993 to 2007. Similarly, in the graphs of the share of earnings received by quintile, the share of earnings received by the top 5% of workers is separated into two subperiods. In addition, in the discussion of the change from 1979 to 2007 in the share of total weekly earnings received by the top 5% of earners, the percentage point change is the sum of changes over the two subperiods. Gini Coefficient The Gini coefficient is a measure of earnings equality that ranges from 0 to 1. If the earnings of all individuals are the same, the Gini coefficient is equal to 0, representing complete equality. If one worker receives all of the earnings and all other workers receive zero earnings, the Gini coefficient is equal to 1. Thus, a larger coefficient indicates a greater degree of inequality. More information on the Gini coefficient is provided in the Appendix. All Workers. Inequality increased among all workers over the period from 1979 to 2007. Inequality also increased among both men and women. From 1979 to 2007, periods of rising inequality were followed by periods when inequality fell. In general, inequality increased from 1980 to 1989, then declined slightly from 1989 to 1992, before rising again from 1993 to 1995. A decline in inequality from 1995 to 1999 was offset by an increase in inequality from 1999 to 2005. Inequality fell from 2005 to 2007. Even within this general pattern, however, there were some yearto-year variations in the trend in inequality. (See Figure 12.) From 1979 to 2007, inequality increased more among men and women, analyzed separately, than among men and women analyzed together. One explanation for this difference is that, at the same time that overall inequality increased, the distribution of earnings among women became more similar to the distribution of earnings among men — as reflected in the narrowing of earnings gap between men and women. Although overall inequality declined from 2005 to 2007, among women it increased from 2005 to 2006 and then declined from 2006 to 2007. CRS-25 Figure 12. Gini Coefficient, All Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). Note: Because of changes in topcoding from 1992 to 1993, the Gini coefficient is separated into two subperiods: 1979-1992 and 1993-2007. Full-Time, Year-Round Workers. The distribution of earnings among workers employed full-time, year-round is more equal than the distribution of earnings among all workers. Nevertheless, from 1979 to 2007, inequality also increased among persons who work full-time, year-round. Periods of rising inequality were followed by periods when inequality declined. From 2006 to 2007, the distribution of earnings became more equal. Inequality among women is significantly lower than inequality among men. But inequality among men and women, analyzed separately, increased more than inequality among all full-time, year-round workers. (See Figure 13.) CRS-26 Figure 13. Gini Coefficient, Full-Time, Year-Round Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). Note: Because of changes in topcoding from 1992 to 1993, the Gini coefficient is separated into two subperiods: 1979-1992 and 1993-2007. The Share of Total Weekly Earnings by Quintile The Gini coefficient shows whether the distribution of earnings has changed over time, but it does not show where the distribution may have changed. To analyze where the earnings distribution has changed, this section examines the share of total weekly earnings received by each quintile of workers. All Workers. An analysis of the share of total weekly earnings by quintile shows that inequality was greater in 2007 than in 1979. At the end of the period, the top 5% of earners received a larger share of total weekly earnings, while other workers received a smaller share. For example, from 1979 to 2007, the share of earnings received by the top 5% of earners increased by 2.6 percentage points. Over the 28-year period, when inequality increased it was generally because the top 5% of earners received a larger share of total earnings, while other workers received a smaller share. Conversely, when inequality declined, it was generally because the top 5% of earners received a smaller share of total earnings and other workers received a larger share. (See Figure 14.) From 2006 to 2007, the share of total earnings received by the top 5% of workers dipped slightly (from 24.9% to 24.3%). Changes in the share of earnings received by men and women generally followed the same pattern as the trend for all workers. (See Table 8 in the Appendix. The percentage point changes over the different periods shown in Table 8 match the years over which the Gini coefficient increased or decreased over the 28year period.) CRS-27 Figure 14. Share of Total Weekly Earnings by Quintile, All Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). Note: Because of changes in topcoding from 1992 to 1993, the share of earnings received by the top 5% of earners is separated into two subperiods: 1979-1992 and 1993-2007. Full-Time, Year-Round Workers. Inequality also increased among fulltime, year-round workers from 1979 to 2007. Over the period, the top quintile of earners gained a larger share of total weekly earnings, while the first four quintiles received a smaller share. From 1979 to 2007, the share of earnings received by the top 5% of earners increased by 1.5 percentage points. The share of earnings received by the second and third quintiles fell by 1.5 and 1.6 percentage points, respectively. Similar to the pattern among all workers, when inequality increased among full-time, year-round workers, the share of earnings received by the bottom four quintiles generally decreased, while the share received by the top quintile — especially the top 5% of earners — increased. Conversely, when inequality fell, the opposite occurred. (See Figure 15.) The same pattern generally held for both men and women. Inequality declined from 2006 to 2007. Over the two-year period, the share of total earnings received by the top 5% of earners fell from 22.4% to 20.7%, while the share of earnings received by the bottom four quintiles increased. CRS-28 Figure 15. Share of Total Weekly Earnings by Quintile, Full-Time, Year-Round Workers, 1979-2007 Source: CRS analysis of data from the Current Population Survey (CPS). Note: Because of changes in topcoding from 1992 to 1993, the share of earnings received by the top 5% of earners is separated into two subperiods: 1979-1992 and 1993-2007. Reasons for Changes in the Share of Total Weekly Earnings by Quintile. The share of earnings received by workers at each quintile may change for many reasons. The relative number of hours worked may change and relative earnings per hour may change. As discussed at the beginning of this report, both the percentage of workers employed full-time and the percentage of workers employed full-time, year-round tend to fall during recessions. During an economic expansion, as the demand for labor increases, both hours worked and earnings per hour often rise, especially among lower-wage workers.23 For example, the data on real weekly earnings in Table 1 in the Appendix show that, when inequality fell from 1995 to 1999, the real weekly earnings for workers at the 20th percentile increased by 12.3%, compared to a 12.6% increase for workers at the 95th percentile. Conversely, when inequality increased from 1980 to 1989, earnings at the 20th percentile rose by 1.1%, but increased 13.4% at the 95th percentile. Several other factors may also affect relative earnings. The supply of and demand for workers with different skills may change. Changes in consumer tastes or technology may affect the demand for labor. Social and demographic changes 23 During an economic expansion, in order to hire more workers, employers may offer higher wages. Employers may also ask workers to work, or require, more overtime. Both of these changes would increase total weekly earnings. CRS-29 may affect the supply of labor. Changes in wages may affect both the demand for and the supply of labor. Congress may enact policies that affect earnings. For example, during the period from 1979 to 2007, Congress passed four laws that raised the basic federal minimum wage.24 Following welfare reform in 1996, the employment of single mothers increased significantly.25 Regulatory changes or changes in trade policy may affect earnings. U.S. firms may engage in greater outsourcing. Foreign companies may increase investment in the United States. Each of these changes may affect the distribution of workers in different occupations and industries. For example, the decline in manufacturing employment in the United States since 1979 (when employment peaked at 19.4 million) may have affected both wages and fringe benefits.26 Union membership in the United States, which also peaked in 1979 (at 21.0 million), may also have affected earnings and fringe benefits.27 Separating the effect of each of these (and other) factors on earnings and fringe benefits is difficult, however. In addition, economists may not agree on the effects of each factor. 24 The first law (P.L. 95-151) raised the minimum wage in January 1979, January 1980, and January 1981. The second law (P.L. 101-157) raised the wage in April 1990 and April 1991. The third law (P.L. 104-188) raised the wage in October 1996 and September 1997. In 2007, Congress enacted P.L. 110-28, which raised the minimum wage, in steps, from $5.15 to $7.25 an hour. The minimum wage rose to $5.85 in July 2007 and to $6.55 in July 2008. It will rise to $7.25 an hour in July 2009. CRS Report RL33754, Minimum Wage in the 110th Congress, by William G. Whittaker. 25 Among other things, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) set a time limit on cash welfare assistance and imposed greater work requirements on welfare recipients. CRS Report RL32760, Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions, by Gene Falk. 26 From 1979 to 2007, employment in manufacturing in the United States fell from 19.4 million to 13.9 million, a decrease from 21.6% to 10.1% of total nonfarm employment. U.S. Department of Labor, Bureau of Labor Statistics, Employment, Hours, and Earnings from the Current Employment Statistics Survey, available at [stats.bls.gov/ces/home.htm]. 27 Research has concluded that union workers generally earn more than nonunion workers. CRS Report RL32553, Union Membership Trends in the United States, by Gerald Mayer. CRS-30 Appendix: Measures of Inequality, Data, and Methodology This Appendix provides an explanation of the measures of inequality used in this report. It also describes the source of data and the methodology used in the report. The second part of the Appendix shows the data used in the text and graphs in the report. Measures of Inequality This report uses two measures of inequality: the Gini coefficient and the share of earnings received by each quintile of workers. Gini Coefficient. The Gini coefficient is calculated using the following formula: where fi is the proportion of earners in interval (i) and pi is the proportion of total earnings received by earners in interval 1 and all lower intervals.28 Graphically, the Gini coefficient is illustrated in Figure 16. The horizontal axis shows the percent of all earners; the vertical axis shows the percent of earnings received by all earners. The diagonal line represents total earnings equality. For example, on the diagonal line, 25% of earners receive 25% of earnings, 50% of earners receive 50% of earnings, and so on. In Figure 16 the two dotted lines — called Lorenz curves — illustrate two possible earnings distributions. The Gini coefficient is the ratio of (a) the area between the diagonal line and the Lorenz curve and (b) the total area under the diagonal line. The two earnings distributions in Figure 16 may represent the earnings for two groups of workers — or the same group of workers at different times. The distribution of earnings for the first group (where the Gini coefficient is .163) is more equal than the distribution of earnings for the second group (where the Gini coefficient is .289). For the first group of workers, the bottom 60% of workers receive half of all earnings; the top 40% receive the other half of earnings. In the second group, the bottom 70% of earners receive half of all earnings; the top 30% receive the other half. Share of Total Earnings by Quintile. To calculate the share of earnings received by each quintile of earners, workers are first ranked from lowest to highest paid. Workers are then divided into five equal-size groups, or quintiles. The total earnings received by each quintile is divided by the total earnings of all workers. If 28 U.S. Bureau of the Census, Studies in the Distribution of Income, Series P60-183, 1992, p. 60. CRS-31 everyone’s earnings were the same, each quintile would receive one-fifth of all earnings. The greater the share of earnings received by the highest paid workers (i.e., the top quintile) or the smaller the share of earnings received by the lowest paid workers (i.e., the lowest quintile) the greater the degree of inequality. In this report, the top quintile of earners is further separated into two groups: the top 5% of earners and the top 81% to 95% of earners. Data Source and Methodology The analysis in this report uses data from the Annual Social and Economic (ASEC) supplement to the monthly Current Population Survey (CPS). The CPS is a household survey conducted by the U.S. Bureau of the Census for the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor. The monthly CPS is the source of the national monthly unemployment rate and other labor force data. Figure 16. Illustration of Lorenz Curves and Gini Coefficients for Two Groups of Workers Source: Illustration created by CRS. The ASEC supplement to the monthly CPS asks additional questions about individual earnings for the previous year. The sample is representative of the civilian noninstitutional population of the United States. The sample for the supplement includes members of the Armed Forces living in civilian housing units on a military base or in a household not on a military base. The sample does not include persons living in institutions (such as mental hospitals, nursing homes, or correctional facilities). The 2008 supplement interviewed about 76,600 households.29 29 U.S. Census Bureau, Current Population Survey, 2008 Annual Social and Economic (continued...) CRS-32 The ASEC supplement collects earnings information for both wage and salary workers and self-employed persons. Some workers may have both wage and salary income and self-employment income. In addition, self-employed persons may have both wages and income or loss from investment in their business (e.g., in equipment, buildings, office space, materials, supplies, and other kinds of capital). Since wages cannot be negative, this report uses positive earnings only; i.e., it excludes persons whose investment losses were greater than their wage. But this approach may include investment losses if a person combines their wage and investment loss and their wage is greater than their investment loss. The approach may also include investment income, if a person reports his or her earnings as the total of their wage and investment income. Excluding persons with negative earnings has little or no effect on the real earnings by percentile shown in this report. Including persons with negative earnings increases the level of inequality, but has little or no effect on the trend in inequality. In Tables 1 and 2, comparisons of real earnings between consecutive years should be made with caution. When answering the question about annual earnings, some respondents may round off their earnings. For example, many people may report that they earn $50,000 a year, when they earn either more or less than $50,000. From one year to the next, this rounding may affect the observed trend in real weekly earnings. CPI-U-RS. In this report, nominal weekly earnings were adjusted for inflation using the CPI-U-RS (the Consumer Price Index for all Urban Consumers Research Series). Over the years, BLS has introduced a number of changes in the way it measures changes in prices. Each improvement is intended to make the CPI-U more accurate. But the historical CPI-U is not adjusted to take the improvements into account. The CPI-U-RS adjusts the historical CPI-U (starting in 1978) to take into account most of the improvements made in measuring price changes. The CPI-U-RS shows what the CPI-U would have been if current methods had been used to measure inflation. Compared to the CPI-U, the CPI-U-RS provides a more consistent measure of inflation.30 Topcoded Earnings. In the ASEC supplement, if a person’s annual earnings exceed a certain amount (i.e., a topcode), the individual’s actual earnings are not reported. Instead, the CPS reports the average earnings of those persons whose earnings are above the topcoded amount. For 2007 (i.e., the 2008 ASEC), annual earnings from a person’s longest job were topcoded at $200,000. BLS averages earnings for several groups of workers, based on gender, race, Hispanic origin, and work experience. For example, the CPS reports average earnings for all white, nonHispanic men who work full-time, year-round and whose earnings for their longest 29 (...continued) (ASEC) Supplement, available at [http://www.census.gov/apsd/techdoc/cps/cpsmar08.pdf], pp. 1-1, 9-3, G-2. 30 Stewart, Kenneth J, and Stephen B. Reed, “Consumer Price Index Research Series Using Current Methods, 1978-98,” Monthly Labor Review, vol. 122, June 1999, p. 29. CRS-33 held job are over $200,000. To arrive at total annual earnings, this amount is added to any earnings from other employment (e.g., a person may have held more than one job during the year). In this report, topcoding may affect the measures of inequality in two ways. First, because of topcoding, the Gini coefficient may understate the degree of inequality. Topcoding should have less of an effect on the estimates of real weekly earnings or the estimates of the share of total weekly earnings by quintile. Second, as described in the text of this report, because of changes in 1994 (affecting annual earnings for 1993) in the way the CPS recorded the earnings of the highest paid workers, the observed trend in inequality may not be comparable for years 1979 to 1992 and the years 1993 and later. Confidence Levels. Estimates based on survey responses from a sample of households have two kinds of error: nonsampling and sampling. Examples of nonsampling error include information that is misreported and errors made in processing collected information. Sampling error occurs because a sample, and not the entire population, of households is surveyed. The difference between an estimate based on a sample of households and the actual population value is known as sampling error. When using sample data, researchers typically construct confidence intervals around population estimates. Confidence intervals provide information about the accuracy of estimated values. With a 95% confidence interval and repeated samples from a population, 95% of intervals will include the average estimate of a population characteristic. Data Used in Text and Graphs The remainder of this Appendix provides the data used in the text and graphs in this report. In Tables 8 and 9, the percentage point changes over the different periods shown are intended to match the years over which the Gini coefficient increased or decreased over the 28-year period. CRS-34 Table 1. The Trend in Real Weekly Earnings: All Workers, 1979-2007 Earnings 1979 1980 1981 1982 1983 1984 1985 Average Earnings $660 20th Percentile 244 40th Percentile 426 th 639 60 Percentile 80th Percentile 973 95th Percentile 1,587 $644 240 416 626 949 1,560 $634 226 418 625 938 1,525 $636 222 402 617 952 1,587 $638 223 398 611 951 1,579 $643 219 402 621 950 1,635 $663 226 421 636 990 1,654 Average Earnings 843 20th Percentile 353 40th Percentile 614 60th Percentile 870 80th Percentile 1,177 95th Percentile 1,894 817 339 582 839 1,152 1,843 803 328 561 841 1,138 1,847 801 310 555 802 1,155 1,904 801 304 552 799 1,141 1,902 805 302 548 832 1,170 1,901 830 310 551 845 1,202 1,944 427 176 304 440 616 958 422 168 300 429 631 968 430 168 302 436 635 992 439 166 304 457 649 1,027 449 168 303 450 658 1,048 463 173 313 459 698 1,060 Average Earnings 20th Percentile 40th Percentile 60th Percentile 80th Percentile 95th Percentile 428 174 307 438 614 962 1986 1987 All Workers $688 $692 229 234 417 433 660 672 1,023 1,007 1,736 1,679 Men 867 863 320 322 572 571 868 839 1,215 1,239 2,083 2,015 Women 475 491 174 175 316 333 481 497 700 732 1,128 1,175 1988 1989 1990 1991 1992 1993 1994 $701 232 428 664 1,017 1,694 $718 242 437 678 1,035 1,770 $703 239 444 663 1,020 1,745 $698 240 428 668 1,004 1,713 $704 245 434 668 1,015 1,754 $733 239 431 674 1,033 1,775 $753 244 426 665 1,054 1,862 877 324 583 844 1,231 2,105 895 323 580 858 1,242 2,173 864 320 562 828 1,201 2,070 853 309 562 828 1,199 2,123 854 306 557 835 1,207 2,088 897 303 543 815 1,223 2,174 925 319 538 819 1,250 2,261 498 175 324 489 745 1,182 513 186 336 503 770 1,242 514 185 338 503 760 1,242 518 186 343 514 771 1,256 529 193 337 529 780 1,274 546 190 340 530 799 1,318 556 193 346 532 798 1,330 CRS-35 Earnings 1995 1996 1997 1998 1999 2000 Average Earnings 20th Percentile 40th Percentile 60th Percentile 80th Percentile 95th Percentile $764 249 442 675 1,039 1,871 $764 253 456 683 1,038 1,898 $789 258 465 704 1,065 1,982 $820 269 489 733 1,099 2,003 $813 280 479 719 1,149 2,106 $858 289 501 741 1,158 2,107 Average Earnings 20th Percentile 40th Percentile 60th Percentile 80th Percentile 95th Percentile 937 312 546 831 1,247 2,223 930 316 557 828 1,265 2,278 964 330 582 867 1,262 2,428 993 344 611 879 1,319 2,443 988 357 598 905 1,364 2,489 1,054 361 602 905 1,389 2,524 Average Earnings 20th Percentile 40th Percentile 60th Percentile 80th Percentile 95th Percentile 568 197 342 520 805 1,351 575 202 354 531 810 1,392 589 206 372 547 842 1,431 627 220 381 586 855 1,474 618 229 383 598 885 1,555 639 232 410 602 926 1,575 2001 2002 All Workers $872 $877 293 288 504 510 751 771 1,149 1,153 2,228 2,216 Men 1,047 1,068 354 355 609 621 901 887 1,351 1,383 2,590 2,660 Women 674 663 234 240 410 421 609 621 901 922 1,640 1,633 2003 2004 2005 2006 2007 Percent Change, 1979-2007 $873 283 516 759 1,171 2,168 $861 285 507 739 1,161 2,111 $876 294 511 743 1,168 2,173 $876 297 494 771 1,187 2,175 $874 292 500 769 1,154 2,212 25.9% 19.5% 17.4% 20.4% 18.6% 39.4% 1,042 357 607 902 1,409 2,602 1,036 357 612 887 1,372 2,629 1,055 355 613 882 1,381 2,655 1,042 360 593 890 1,384 2,610 1,035 365 596 900 1,365 2,653 16.7% 3.6% -2.9% 3.4% 16.0% 40.1% 682 236 428 629 939 1,669 662 232 422 633 933 1,647 672 245 408 613 940 1,634 688 237 411 614 964 1,701 691 250 423 635 962 1,700 50.4% 43.5% 37.8% 44.9% 56.5% 76.7% Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Note: Weekly earnings are in 2007 dollars. Estimates are for persons age 16 and over. a. Because of changes in topcoding that affected the change in average weekly earnings between 1992 and 1993, the percent change in earnings from 1979 to 2007 is the sum of changes from 1979 to 1992 and 1993 to 2007. CRS-36 Table 2. The Trend in Real Weekly Earnings: Full-Time, Year-Round Workers, 1979-2007 Percentile 1979 1980 1981 1982 1983 1984 Average Earnings $839 20th Percentile 430 40th Percentile 614 60th Percentile 819 80th Percentile 1,126 95th Percentile 1,792 $816 424 599 813 1,106 1,751 $807 421 589 799 1,094 1,716 $811 401 595 793 1,111 1,785 $808 403 574 791 1,119 1,819 $819 402 585 804 1,097 1,828 Average Earnings 985 20th Percentile 532 40th Percentile 768 60th Percentile 983 80th Percentile 1,280 95th Percentile 2,047 957 511 737 958 1,244 1,981 948 505 732 952 1,262 2,019 952 492 714 952 1,270 2,023 947 495 723 951 1,275 2,017 958 486 731 950 1,279 2,091 Average Earnings 560 20th Percentile 358 40th Percentile 461 60th Percentile 563 80th Percentile 737 95th Percentile 1,024 558 346 461 553 737 1,050 555 337 450 568 752 1,052 573 345 456 595 770 1,088 580 342 457 590 761 1,141 589 347 469 597 804 1,135 1985 1986 1987 1988 All Full-Time, Year-Round Workers $838 $862 $866 $869 424 417 419 421 601 625 604 615 816 833 839 842 1,131 1,180 1,175 1,166 1,802 1,909 1,880 1,943 Men 981 1,009 1,012 1,014 495 498 504 486 707 729 739 745 972 1,007 1,007 972 1,308 1,354 1,343 1,334 2,120 2,252 2,182 2,267 Women 606 625 637 646 353 347 353 356 477 486 504 486 618 625 638 648 829 854 843 874 1,187 1,246 1,259 1,296 1989 1990 1991 1992 1993 1994 $888 430 621 838 1,187 1,987 $860 414 591 828 1,169 1,922 $854 414 600 828 1,142 1,941 $868 418 613 835 1,169 1,949 $901 408 598 815 1,168 2,011 $914 401 609 825 1,197 2,062 1,036 497 745 994 1,366 2,329 992 473 710 946 1,331 2,218 987 475 714 971 1,326 2,198 1,002 473 696 975 1,342 2,228 1,042 462 679 951 1,359 2,310 1,054 458 683 941 1,330 2,394 657 363 497 652 900 1,316 654 355 503 651 887 1,331 659 356 508 657 885 1,370 673 362 509 693 908 1,392 692 353 516 679 943 1,359 702 351 505 665 931 1,463 CRS-37 Percentile 1995 1996 1997 1998 Average Earnings 20th Percentile 40th Percentile 60th Percentile 80th Percentile 95th Percentile $905 405 598 826 1,169 2,026 $925 409 607 830 1,212 2,024 $941 421 619 862 1,239 2,106 $961 440 635 855 1,221 2,199 Average Earnings 20th Percentile 40th Percentile 60th Percentile 80th Percentile 95th Percentile 1,049 468 675 935 1,336 2,390 1,065 478 683 960 1,341 2,404 1,088 495 718 991 1,362 2,477 1,103 489 733 977 1,433 2,443 Average Earnings 20th Percentile 40th Percentile 60th Percentile 80th Percentile 95th Percentile 690 364 517 670 935 1,455 719 368 506 683 940 1,518 728 372 520 694 966 1,511 752 366 537 733 977 1,588 1999 2000 2001 2002 2003 All Full-Time, Year-Round Workers $957 $999 $1,014 $1,014 $1,011 431 440 450 443 434 643 648 653 665 650 873 880 901 887 879 1,268 1,273 1,306 1,330 1,301 2,287 2,315 2,252 2,327 2,385 Men 1,107 1,169 1,167 1,168 1,155 488 486 495 488 499 718 722 721 731 737 1,005 1,028 1,013 997 1,019 1,436 1,505 1,464 1,551 1,518 2,632 2,779 2,703 2,771 2,775 Women 744 758 799 797 810 377 384 405 399 395 538 556 563 554 564 718 722 743 754 759 996 1,011 1,017 1,055 1,084 1,654 1,621 1,689 1,729 1,756 2004 2005 2006 2007 Percent Change, 1979-2007 $1,004 435 633 878 1,267 2,322 $1,007 429 633 878 1,307 2,390 $1,012 435 633 890 1,285 2,373 $994 442 650 885 1,320 2,308 13.7% a 2.9% 5.8% 8.0% 17.2% 28.8% 1,147 486 739 1,013 1,478 2,744 1,152 490 715 1,021 1,481 2,839 1,145 481 692 989 1,483 2,808 1,124 481 715 981 1,469 2,712 9.7% a -9.7% -6.9% -0.2% 14.8% 32.4% 802 401 549 739 1,055 1,773 800 404 552 747 1,062 1,777 823 396 554 752 1,068 1,879 813 385 577 769 1,058 1,827 37.7% a 7.3% 25.2% 36.6% 43.5% 78.5% Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Note: Weekly earnings are in 2007 dollars. Estimates are for persons age 16 and over. a. Because of changes in topcoding that affected the change in average weekly earnings between 1992 and 1993, the percent change in earnings from 1979 to 2007 is the sum of changes from 1979 to 1992 and 1993 to 2007. CRS-38 Table 3. Employment-Based Health Insurance Coverage, All Workers by Quintile, 1987-2007 (percent) Percentile 1987 1988 1989 1990 1991 1992 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 49.2 60.0 77.6 85.6 90.4 86.3 48.8 58.6 76.6 85.8 90.3 86.6 48.4 59.3 76.2 86.5 89.3 84.4 46.5 57.3 75.1 84.5 88.4 82.7 45.4 57.6 75.1 84.8 88.2 83.4 44.1 53.4 73.6 83.3 88.1 82.3 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 43.3 61.0 79.1 88.2 89.9 86.0 42.5 58.0 79.4 87.7 90.5 85.9 42.7 58.6 79.6 87.6 89.0 83.3 40.5 57.0 75.7 85.8 88.0 82.3 38.4 57.1 75.3 85.5 88.3 82.1 36.9 52.6 73.1 84.1 86.7 83.0 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 52.3 57.9 76.3 86.4 91.2 88.1 52.0 58.3 75.3 86.4 91.0 86.5 51.1 58.6 75.3 86.8 90.8 84.7 49.4 56.1 76.3 85.5 89.4 87.2 49.7 56.2 75.6 86.6 90.4 87.4 47.4 55.3 74.2 85.2 90.4 85.3 1993 1994 All Workers 43.6 50.7 53.9 57.7 73.8 75.5 82.1 84.9 85.6 89.8 81.9 85.4 Men 38.9 45.3 53.8 57.4 73.1 75.4 83.0 86.6 84.7 89.4 81.3 84.3 Women 45.6 52.8 54.2 58.4 73.5 74.7 84.2 86.8 87.9 90.9 84.4 88.1 1995 1996 1997 1998 1999 50.3 57.9 75.1 84.9 89.3 85.5 49.7 57.6 75.4 85.6 88.8 85.5 49.9 58.6 74.9 85.4 88.8 84.0 50.2 59.2 76.3 85.3 89.4 85.6 50.2 60.2 76.7 86.3 88.7 85.8 45.3 56.8 76.2 86.0 88.6 85.1 44.2 57.9 75.3 86.5 88.4 84.3 44.1 58.5 76.6 86.5 88.4 82.5 44.7 60.2 77.5 86.5 88.7 85.8 46.6 60.4 79.0 86.7 88.8 84.2 52.4 58.3 75.5 84.8 91.6 88.1 52.5 57.0 76.4 86.3 90.6 87.2 52.2 57.6 76.4 85.5 89.8 87.5 53.0 57.9 76.7 85.6 89.7 87.5 51.3 58.3 77.4 86.4 90.1 87.3 CRS-39 Percentile 2000 2001 2002 2003 2004 2005 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 51.3 62.1 78.8 86.7 89.2 86.7 49.6 61.5 78.0 86.6 89.0 85.4 48.6 60.2 76.4 85.4 88.4 83.8 47.3 58.1 75.8 84.7 88.1 84.3 48.2 58.5 75.4 84.8 88.1 85.9 47.2 58.0 75.5 84.8 87.4 86.4 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 46.8 63.0 79.3 87.6 88.7 86.9 44.9 62.0 79.3 85.9 88.9 84.8 44.1 58.9 77.7 85.4 88.1 82.5 43.5 58.1 75.8 85.3 86.9 84.0 43.4 57.0 74.5 85.7 87.1 84.9 42.7 55.9 75.6 84.3 87.2 85.6 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 53.2 60.9 79.6 86.9 90.4 87.8 52.1 60.7 78.0 87.5 91.3 86.4 50.3 60.1 77.8 86.8 88.8 87.1 49.2 57.5 75.9 86.2 89.5 88.1 50.8 58.0 76.5 87.6 89.9 88.5 49.9 58.8 77.0 86.4 89.8 87.1 2006 2007 All Workers 47.2 46.8 57.8 57.4 75.1 76.2 83.8 83.8 87.5 87.5 84.6 84.7 Men 41.6 41.7 56.4 56.2 75.2 75.3 83.5 83.5 86.5 87.4 82.9 84.4 Women 49.3 49.5 59.0 58.6 76.2 76.3 85.8 87.1 90.1 88.8 88.0 86.1 Change in Percent, 1987-1993 Change in Percent, 1994-2000 Change in Percent, 2000-2007 Change in Percent, 1987-2007 -5.6 -6.2 -3.8 -3.5 -4.8 -4.4 0.7 4.4 3.2 1.8 -0.6 1.2 -4.5 -4.7 -2.6 -3.0 -1.7 -2.0 -9.4 a -6.5 -3.1 -4.7 -7.0 -5.2 -4.4 -7.2 -6.0 -5.2 -5.2 -4.8 1.5 5.6 3.9 1.0 -0.7 2.6 -5.1 -6.8 -3.9 -4.1 -1.3 -2.4 -8.0 -8.3 -6.1 -8.3 -7.2 -4.6 -6.7 -3.7 -2.9 -2.3 -3.2 -3.7 0.5 2.5 4.8 0.1 -0.5 -0.3 -3.8 -2.3 -3.3 0.2 -1.6 -1.7 -10.0 -3.5 -1.3 -2.0 -5.3 -5.6 Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Notes: Estimates are for persons age 16 and over. a. Because of changes in the CPS health insurance questions in 1994, the change shown from 1987 to 2007 is the sum of the change from 1987 to 1993 and from 1994 to 2007. CRS-40 Table 4. Employment-Based Health Insurance Coverage, Full-Time, Year-Round Workers, by Quintile, 1987-2007 (percent) Percentile 1987 1988 1989 1990 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 59.2 82.2 87.6 91.4 92.4 88.8 58.9 80.1 87.0 90.9 93.1 89.5 58.4 80.7 86.7 91.1 91.1 86.4 55.8 78.5 85.4 89.6 90.9 86.7 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 55.4 80.7 88.4 92.2 91.8 88.2 53.5 78.7 87.7 91.7 92.9 89.7 53.9 79.9 87.1 91.8 90.1 86.4 50.2 76.1 85.1 90.0 90.0 86.7 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 60.3 83.9 89.2 91.8 94.0 91.6 60.8 82.8 88.6 92.0 94.5 89.0 60.7 81.1 88.6 91.9 93.2 89.4 58.8 82.6 88.7 90.7 92.0 90.5 1991 1992 1993 1994 1995 All Full-Time, Year-Round Workers 56.8 53.4 53.3 55.4 55.4 77.4 77.5 76.1 77.8 76.4 86.6 85.3 83.8 84.6 83.5 90.2 89.2 87.6 90.7 90.0 90.9 90.5 88.1 92.1 91.3 85.6 85.7 85.0 88.9 88.1 Men 51.4 48.4 48.2 50.1 52.1 76.2 74.8 73.4 74.4 73.4 84.9 84.8 82.7 84.8 83.3 90.1 89.0 87.5 90.5 89.7 90.0 88.6 86.8 91.6 90.4 86.5 86.6 84.2 88.0 88.3 Women 59.9 56.4 56.8 59.2 57.7 81.4 81.2 79.3 80.9 79.9 88.1 87.5 87.9 88.7 84.5 92.3 91.3 89.6 91.7 91.1 92.8 93.1 90.0 93.6 94.4 89.7 88.9 88.6 92.2 91.1 1996 1997 1998 1999 55.8 77.6 84.1 90.0 90.7 88.8 55.0 76.3 84.8 89.7 90.5 87.5 54.3 76.4 84.5 89.0 90.9 88.5 55.5 76.6 85.9 89.4 91.2 88.7 51.1 73.8 85.1 89.7 90.6 88.5 51.0 73.4 85.2 89.6 90.0 86.3 50.1 73.8 84.8 89.8 89.9 88.7 51.1 75.0 86.3 89.4 90.8 87.7 58.5 81.1 86.8 90.9 92.8 89.8 57.5 79.8 86.3 90.9 91.7 91.7 57.6 79.3 86.0 89.2 92.1 90.4 56.1 80.9 87.4 90.0 93.0 90.0 CRS-41 Percentile 2000 2001 2002 2003 2004 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 55.9 78.3 86.1 90.2 91.4 89.7 55.9 76.5 86.5 89.9 91.0 88.4 55.2 74.4 85.4 88.7 89.9 86.7 52.0 74.7 83.9 89.0 90.0 88.1 52.5 74.0 83.7 89.0 90.1 88.2 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 51.3 76.9 85.8 90.2 91.1 89.0 51.5 74.8 85.9 89.3 90.7 87.7 49.3 72.5 84.9 88.7 89.2 85.8 47.7 73.3 82.9 88.0 88.9 88.1 47.6 70.8 82.1 88.0 89.4 87.5 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 58.0 81.9 86.5 91.4 93.6 92.2 58.0 79.1 87.8 92.3 93.8 89.5 57.5 79.6 86.6 91.0 91.5 89.1 54.5 77.7 85.8 91.6 91.9 90.3 55.7 77.9 88.5 91.7 91.6 90.3 Change in Percent, 2005 2006 2007 1987-1993 All Full-Time, Year-Round Workers 50.9 50.6 51.6 -6.0 73.8 72.7 73.3 -6.1 84.1 83.4 83.6 -3.7 88.4 87.7 88.0 -3.8 -4.3 89.9 89.6 89.5 -3.8 88.7 87.1 88.0 Men -7.2 46.1 45.0 46.6 70.6 69.9 70.3 -7.3 82.4 82.2 81.4 -5.7 87.5 86.8 87.4 -4.7 -5.0 89.0 88.3 89.6 -4.0 88.1 86.1 86.7 Women 55.7 55.5 55.7 -3.5 77.6 76.2 76.8 -4.6 86.6 86.6 86.9 -1.3 90.7 89.5 90.2 -2.1 -4.0 92.9 92.8 91.8 -3.0 89.6 89.8 89.9 Change in Percent, 1994-2000 Change in Percent, 2000-2007 Change in Percent, 1987-2007 0.5 0.6 1.5 -0.5 -0.7 0.8 -4.3 -5.0 -2.5 -2.1 -1.9 -1.7 -9.8 a -10.5 -4.7 -6.4 -6.9 -4.7 1.2 2.5 1.0 -0.3 -0.5 1.0 -4.7 -6.6 -4.4 -2.8 -1.4 -2.2 -10.7 -11.4 -9.1 -7.8 -7.0 -5.3 -1.1 1.0 -2.2 -0.3 0.0 0.0 -2.3 -5.1 0.4 -1.3 -1.8 -2.3 -6.9 -8.7 -3.1 -3.7 -5.8 -5.3 Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Notes: Estimates are for persons age 16 and over. a. Because of changes in the CPS health insurance questions in 1994, the change shown from 1987 to 2007 is the sum of the change from 1987 to 1993 and from 1994 to 2007. CRS-42 Table 5. Employer- or Union-Provided Pension Coverage, All Workers, by Quintile, 1979-2007 (percent) Percentile 1979 1980 1981 1982 1983 1984 1985 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 7.4 24.4 46.2 63.4 73.7 64.9 7.0 24.2 46.6 63.9 73.0 66.2 6.2 23.2 45.7 63.0 73.4 66.9 5.9 23.1 44.3 63.0 71.9 65.6 5.8 21.4 45.0 63.0 71.4 65.0 5.6 21.2 43.4 60.6 71.5 64.0 5.9 21.1 43.3 61.8 72.3 65.4 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 9.0 32.9 55.5 72.0 73.1 62.1 9.1 31.8 56.0 70.5 73.3 63.9 7.9 30.3 54.5 69.8 73.9 64.1 7.2 28.4 52.1 69.2 72.1 63.6 6.7 27.7 51.7 68.5 71.9 62.8 7.1 25.2 50.4 66.8 71.8 63.8 6.7 25.6 51.7 67.2 72.3 65.4 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 5.3 18.0 33.0 53.6 68.0 71.9 5.2 16.0 34.6 56.0 69.3 69.3 4.7 16.8 34.7 53.7 70.0 70.0 4.4 15.7 35.5 55.8 70.5 69.5 4.5 14.9 35.2 57.4 69.3 69.3 3.8 15.3 35.8 55.3 68.5 66.8 3.9 16.0 34.7 55.6 70.3 67.6 1986 1987 All Workers 6.1 5.5 21.2 20.6 43.5 41.4 62.0 57.2 70.5 68.8 64.3 61.6 Men 6.8 6.6 26.0 24.7 51.2 46.7 66.1 63.2 71.2 69.7 62.5 60.3 Women 5.3 4.4 14.9 14.9 34.8 34.7 55.8 51.9 70.2 66.4 69.9 65.7 1988 1989 1990 1991 1992 1993 1994 5.9 21.0 41.3 57.4 69.2 63.5 6.3 22.2 42.3 60.1 69.8 61.7 6.8 22.1 43.2 60.1 70.1 61.7 6.6 22.2 44.2 60.8 71.3 63.4 6.3 21.6 43.8 60.8 71.5 64.7 6.3 21.2 43.3 59.9 69.7 62.4 7.6 23.2 45.1 62.5 72.1 65.6 7.4 24.5 45.6 64.4 69.7 62.1 7.5 24.4 48.1 64.6 70.0 60.0 7.9 27.0 47.6 63.6 70.8 60.4 6.9 26.3 47.9 65.1 71.9 61.7 6.2 24.3 46.9 64.9 69.9 64.3 6.6 23.3 46.7 63.6 68.8 60.9 7.9 26.8 48.9 66.0 72.5 64.9 4.3 16.6 33.7 54.0 66.4 64.3 5.3 17.0 36.8 56.4 68.5 64.8 5.3 17.0 36.9 56.6 68.6 65.7 5.7 18.3 38.0 57.8 69.6 68.1 5.9 18.2 38.4 59.6 70.2 70.8 5.4 18.5 38.5 58.3 68.9 66.1 6.3 19.3 39.7 60.5 71.0 68.1 CRS-43 Percentile 1995 1996 1997 1998 1999 2000 2001 2002 2003 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 7.8 22.9 44.9 62.1 70.5 66.9 7.9 24.2 45.4 62.8 72.2 65.5 7.9 25.7 46.0 63.2 70.1 65.8 9.4 27.2 49.0 64.3 72.2 67.6 9.7 27.0 49.2 64.9 71.9 68.7 10.4 28.8 50.4 64.1 71.7 67.7 9.7 27.5 47.7 63.7 70.6 64.4 9.2 26.7 46.7 61.3 68.9 63.3 9.1 26.0 47.3 61.3 70.2 64.6 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 8.4 25.5 49.5 64.2 71.0 66.1 8.7 27.0 48.3 66.6 71.4 65.1 8.7 27.6 50.1 65.2 71.4 65.1 10.0 30.3 53.6 66.6 72.5 66.8 10.0 30.7 53.6 66.9 71.6 68.8 10.8 31.0 52.1 68.0 71.7 68.0 9.8 30.2 51.7 65.2 69.9 65.4 9.3 28.1 49.7 63.0 67.6 63.0 8.9 28.2 47.7 64.1 69.7 62.7 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 6.5 18.6 40.5 59.4 71.4 68.4 6.8 20.5 41.5 60.1 72.4 67.9 6.9 21.1 42.0 61.4 71.0 65.5 8.2 23.0 44.4 62.3 72.3 68.1 9.2 22.0 45.0 62.3 73.1 68.4 9.5 24.8 48.2 62.2 71.3 68.4 8.3 24.0 44.7 61.5 71.9 64.5 8.1 24.6 44.0 59.9 69.3 68.2 8.6 23.2 44.6 60.9 71.2 68.1 2004 2005 All Workers 9.1 9.1 26.9 25.6 46.5 45.9 61.4 60.4 68.5 66.3 65.9 64.2 Men 9.3 9.3 27.7 27.3 47.5 46.7 63.4 60.6 67.8 67.0 66.7 61.7 Women 8.4 7.8 23.5 24.0 45.2 43.1 61.5 60.3 69.3 68.4 68.7 68.0 2006 2007 Change in Percent, 1979-1987 9.7 25.6 43.8 57.1 64.6 60.9 9.8 26.2 47.5 60.0 67.0 62.9 -1.8 -3.9 -4.8 -6.2 -4.8 -3.4 4.9 8.3 9.0 7.0 2.9 6.2 -0.6 -2.6 -3.0 -4.1 -4.7 -4.8 2.4 1.7 1.3 -3.4 -6.7 -2.1 9.5 26.2 44.7 58.2 64.1 59.4 9.3 28.1 47.2 60.2 67.0 60.7 -2.4 -8.2 -8.8 -8.8 -3.4 -1.8 4.2 6.3 5.4 4.9 2.1 7.7 -1.5 -2.9 -4.9 -7.8 -4.7 -7.2 0.3 -4.8 -8.3 -11.8 -6.0 -1.4 8.8 22.1 42.8 58.5 66.7 63.7 8.7 24.8 44.5 62.5 68.7 65.6 -0.9 -3.1 1.7 -1.7 -1.6 -6.2 5.2 9.9 13.5 10.2 5.0 2.8 -0.9 0.0 -3.7 0.4 -2.6 -2.8 3.4 6.8 11.5 8.9 0.7 -6.2 Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Note: Estimates are for persons age 16 and over. Change in Percent, 1987-2000 Change in Percent, 2000-2007 Change in Percent, 1979-2007 CRS-44 Table 6. Employer- or Union-Provided Pension Coverage, Full-Time, Year-Round Workers, by Quintile, 1979-2007 (percent) Percentile 1979 1980 1981 1982 1983 1984 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 29.5 53.1 64.0 74.7 76.2 65.9 29.1 53.4 65.6 73.8 75.4 67.6 28.1 53.2 65.4 73.1 76.1 68.6 28.3 51.6 64.7 72.4 75.4 67.5 26.3 51.3 64.1 72.9 73.8 65.4 25.5 49.3 62.6 70.8 75.4 65.8 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 28.7 56.2 69.5 75.7 74.8 63.3 29.6 54.5 69.2 75.6 75.3 66.3 28.3 55.1 68.1 75.2 76.1 64.8 27.3 52.8 67.1 73.9 74.6 66.5 25.8 52.3 67.5 73.1 73.1 64.2 24.0 50.9 64.1 73.8 72.9 65.7 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 27.3 45.0 60.7 70.9 77.3 78.6 25.9 48.0 61.5 72.3 77.1 72.2 25.3 47.7 61.1 72.4 77.2 75.4 24.9 49.3 62.2 72.0 77.7 73.6 23.7 48.1 62.1 71.5 76.6 72.2 23.8 46.8 61.1 69.4 75.9 75.3 1985 1986 1987 1988 All Full-Time, Year-Round Workers 25.3 24.0 22.7 23.2 48.3 48.6 45.4 44.5 63.8 62.3 58.1 57.4 71.3 70.6 68.2 68.7 75.2 74.0 71.9 72.8 69.4 66.3 64.4 65.1 Men 23.1 22.4 22.6 22.3 50.5 49.7 45.6 43.9 65.2 65.5 60.6 59.2 73.6 71.5 69.7 70.7 75.2 72.8 71.8 73.2 68.0 64.3 61.2 65.0 Women 24.1 22.4 20.0 21.9 45.6 45.2 43.6 41.9 60.3 60.2 56.3 57.5 71.5 70.4 65.5 66.8 77.2 76.2 74.9 74.6 70.6 74.5 71.1 66.4 1989 1990 1991 1992 1993 1994 24.0 46.0 59.2 69.3 72.6 62.1 23.6 45.7 59.8 69.2 74.2 65.9 23.3 46.4 62.4 70.7 75.2 66.0 23.6 46.9 62.2 70.4 75.3 69.9 22.2 45.0 60.4 69.7 73.3 65.7 23.7 48.4 61.2 71.7 75.8 69.8 21.7 46.2 60.0 71.7 70.5 63.6 23.0 45.5 60.2 71.9 73.0 64.1 22.5 47.8 62.2 73.1 73.7 66.8 21.5 46.0 63.1 73.1 71.7 69.3 19.6 43.7 61.1 70.9 71.6 64.4 22.4 46.1 62.8 72.0 75.8 68.7 22.8 45.0 59.1 68.6 74.0 70.5 22.3 44.0 59.2 68.8 75.6 71.1 22.6 44.8 60.0 71.0 75.8 72.0 22.7 48.2 61.6 70.2 77.7 77.5 22.5 46.0 60.9 70.2 74.8 73.6 22.4 48.8 62.3 72.9 76.3 74.9 CRS-45 Percentile 1995 1996 1997 1998 1999 2000 2001 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 23.3 45.8 60.2 69.9 74.3 70.9 24.4 47.5 60.7 71.6 74.9 70.8 24.9 46.8 61.7 70.4 73.6 70.9 25.8 48.3 63.7 70.9 75.2 71.2 25.8 48.1 63.6 71.4 75.7 74.0 25.3 48.7 61.3 71.6 74.8 71.9 24.7 46.3 60.4 70.1 73.4 68.8 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 21.9 45.2 60.7 69.6 74.3 69.5 22.5 45.4 61.5 72.6 74.6 68.9 23.2 45.4 62.7 69.3 74.5 70.9 23.9 47.9 62.5 72.6 74.2 70.8 24.2 48.3 63.9 72.1 75.5 72.8 22.3 47.8 61.8 72.4 75.9 69.8 22.5 44.6 61.5 70.7 72.5 68.7 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 22.7 46.5 57.9 71.6 78.8 71.9 24.4 48.3 61.0 72.3 77.5 72.7 24.5 47.2 62.2 71.9 75.4 71.9 26.5 48.6 63.7 71.0 78.4 73.2 24.2 48.4 63.9 70.9 79.5 73.0 25.1 50.9 62.0 70.3 76.6 75.6 24.6 46.5 61.1 70.0 76.7 70.9 2002 2003 2004 2005 2006 All Full-Time, Year-Round Workers 24.0 22.4 22.7 20.6 21.4 44.3 46.3 44.6 43.5 40.2 59.1 58.1 58.2 58.0 55.1 67.9 68.9 68.3 66.0 63.2 71.7 73.7 72.6 70.6 67.2 69.1 69.2 70.0 67.4 65.5 Men 20.8 19.6 19.4 18.8 18.7 43.1 45.0 41.7 42.2 38.3 59.9 57.3 58.5 56.0 53.4 68.7 69.2 67.9 65.2 62.1 70.1 72.6 70.9 69.5 66.9 65.8 67.1 69.8 65.0 62.8 Women 25.2 23.9 24.6 22.6 23.3 45.5 45.9 47.3 44.5 42.4 59.9 61.5 60.9 59.8 57.0 67.8 70.1 70.3 68.2 65.6 74.0 75.4 72.8 73.3 70.8 76.2 74.0 74.8 73.5 68.2 2007 22.2 44.5 57.6 66.8 69.9 67.3 -6.8 -7.7 -6.0 -6.5 -4.2 -1.5 2.6 3.3 3.3 3.4 2.9 7.5 -3.1 -4.3 -3.7 -4.8 -5.0 -4.6 -7.3 -8.7 -6.4 -7.9 -6.3 1.4 20.0 41.9 56.1 65.6 70.0 64.9 -6.1 -10.6 -8.9 -6.0 -3.0 -2.1 -0.4 2.2 1.2 2.8 4.0 8.6 -2.3 -5.9 -5.7 -6.8 -5.9 -4.9 -8.7 -14.3 -13.4 -10.0 -4.8 1.6 23.9 44.9 60.3 69.0 73.6 71.5 -7.3 -1.4 -4.4 -5.3 -2.4 -7.5 5.1 7.3 5.7 4.8 1.7 4.5 -1.2 -5.9 -1.6 -1.3 -3.0 -4.1 -3.3 0.0 -0.4 -1.9 -3.7 -7.1 Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Note: Estimates are for persons age 16 and over. Change in Change in Change in Change in Percent, Percent, Percent, Percent, 1979-1987 1987-2000 2000-2007 1979-2007 CRS-46 Table 7. Gini Coefficients for All Workers and for Full-Time, Year-Round Workers, 1979-2007 Year 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total Men A. All Workers 0.41764 0.38118 0.41500 0.37902 0.41832 0.38657 0.42416 0.39653 0.42845 0.40207 0.42782 0.39854 0.43445 0.40870 0.43916 0.41606 0.43700 0.41447 0.43918 0.41856 0.44372 0.42770 0.43694 0.42042 0.43603 0.42096 0.43653 0.42484 0.46279 0.45505 0.46807 0.45950 0.47431 0.46835 0.46406 0.45790 0.46617 0.46026 0.46628 0.45756 0.45288 0.44374 0.46679 0.46885 0.47068 0.46564 0.47152 0.47456 0.46831 0.46403 0.46678 0.46611 0.47500 0.47887 0.46989 0.46681 0.46280 0.46190 B. Full-Time, Year-Round Workers 0.33096 0.31298 0.32541 0.30840 0.32860 0.31375 0.33434 0.32216 0.33526 0.32512 0.33670 0.32520 0.34365 0.33669 0.35061 0.34394 0.34967 0.34366 0.35144 0.34608 0.35983 0.35768 0.35580 0.35714 0.35169 0.35032 0.35594 0.35838 0.38496 0.39129 0.39029 0.39629 0.38731 0.39594 0.39246 0.40016 0.39093 0.39941 0.38999 0.39703 0.38020 0.38363 Women 0.37645 0.37979 0.37936 0.38709 0.39513 0.40189 0.40643 0.40608 0.40982 0.41105 0.41192 0.41238 0.41239 0.41204 0.43331 0.43855 0.44358 0.43515 0.43605 0.44347 0.42834 0.42539 0.44669 0.43294 0.44594 0.43695 0.43933 0.44776 0.43873 0.26142 0.26152 0.26255 0.27392 0.27678 0.28272 0.28583 0.29563 0.29781 0.30345 0.30737 0.30509 0.30841 0.30881 0.33265 0.33975 0.33095 0.34233 0.33888 0.34263 0.33654 CRS-47 Year 2000 2001 2002 2003 2004 2005 2006 2007 Total 0.40197 0.40573 0.40194 0.39841 0.40204 0.40645 0.40868 0.39260 Men 0.41458 0.41449 0.41410 0.40673 0.41409 0.42065 0.41705 0.40162 Women 0.33904 0.35912 0.34917 0.35634 0.35386 0.35455 0.37138 0.35423 Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Note: Estimates are for persons age 16 and over. The Gini coefficient is a measure of earnings equality that ranges from 0 to 1. A larger coefficient indicates a greater degree of inequality. CRS-48 Table 8. Share of Total Weekly Earnings by Quintile, All Workers, 1979-2007 (percent) Percentile 1979 1980 1981 1982 1983 1984 1985 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 4.1 10.2 16.0 24.0 27.3 18.5 4.1 10.2 16.0 24.2 27.4 18.1 4.0 10.1 16.0 24.2 27.6 18.1 3.9 9.9 15.9 24.1 27.8 18.4 3.7 9.8 15.9 24.1 27.9 18.6 3.8 9.7 15.8 24.3 28.1 18.3 3.7 9.6 15.6 23.9 27.7 19.4 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 4.1 10.2 16.0 24.0 27.3 18.5 4.1 10.2 16.0 24.2 27.4 18.1 4.0 10.1 16.0 24.2 27.6 18.1 3.9 9.9 15.9 24.1 27.8 18.4 3.7 9.8 15.9 24.1 27.9 18.6 4.1 10.6 17.0 24.5 26.9 16.9 4.1 10.4 16.6 24.0 26.5 18.3 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 4.6 11.5 17.4 24.4 26.3 15.8 4.5 11.4 17.3 24.3 26.5 16.0 4.5 11.2 17.4 24.5 26.8 15.6 4.3 10.9 17.2 24.7 27.1 15.7 4.2 10.7 17.0 24.6 27.3 16.2 4.1 10.5 16.8 24.5 27.3 16.9 4.1 10.3 16.7 24.4 27.3 17.2 1986 1987 All Workers 3.7 3.7 9.5 9.5 15.5 15.6 23.8 23.7 27.6 27.7 19.9 19.7 Men 4.1 4.1 10.2 10.3 16.4 16.4 23.7 23.8 26.2 26.5 19.3 18.9 Women 4.1 4.1 10.3 10.2 16.5 16.5 24.6 24.3 27.6 27.5 16.9 17.4 1988 1989 1990 1991 1992 1993 1994 3.7 9.5 15.6 23.7 27.4 20.1 3.7 9.5 15.4 23.3 27.2 20.9 3.9 9.6 15.5 23.4 27.3 20.3 3.9 9.6 15.5 23.6 27.5 19.9 3.8 9.6 15.6 23.5 27.5 20.0 3.6 9.1 14.8 22.5 26.7 23.3 3.7 9.0 14.5 22.2 26.6 24.1 4.1 10.2 16.3 23.5 26.2 19.7 4.1 10.1 15.9 23.2 26.1 20.8 4.3 10.2 15.9 23.2 26.4 20.0 4.2 10.1 16.0 23.5 26.7 19.6 4.1 10.0 15.9 23.3 26.8 19.9 3.8 9.4 15.0 22.2 26.0 23.6 3.9 9.3 14.7 21.9 25.9 24.4 4.0 10.2 16.5 24.5 27.7 17.2 4.1 10.1 16.3 24.3 27.7 17.4 4.1 10.2 16.3 24.3 27.4 17.7 4.1 10.2 16.2 24.3 27.7 17.6 4.1 10.2 16.2 24.4 27.6 17.4 3.8 9.7 15.7 23.6 27.3 19.8 4.0 9.6 15.4 23.3 27.1 20.7 CRS-49 Change in Change in Change in Change in Change in Change in Percent, Percent, Percent, Percent, Percent, Percent, Percentile 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1980-1989 1989-1992 1993-1995 1995-1999 1999-2005 2005-2007 All Workers Lowest Quintile 3.6 3.8 3.7 3.8 3.9 3.9 3.8 3.8 3.8 3.8 3.8 3.9 4.0 -0.4 0.1 0.0 0.3 -0.1 0.2 Second Quintile 8.9 9.1 9.1 9.1 9.3 9.2 9.1 9.1 9.1 9.2 9.0 9.1 9.3 -0.7 0.1 -0.2 0.4 -0.3 0.2 Third Quintile 14.4 14.6 14.6 14.6 14.9 14.4 14.3 14.3 14.4 14.4 14.1 14.2 14.5 -0.7 0.2 -0.4 0.5 -0.8 0.3 Fourth Quintile 21.9 22.1 21.9 21.8 22.4 21.6 21.4 21.4 21.6 21.7 21.3 21.5 21.6 -0.8 0.2 -0.6 0.5 -1.2 0.3 81-95% 26.2 26.6 26.4 26.3 27.3 26.2 26.3 26.3 26.7 26.7 26.3 26.4 26.4 -0.1 0.2 -0.5 1.1 -1.0 0.1 Top 5% 25.0 23.8 24.3 24.4 22.1 24.7 25.1 25.1 24.4 24.2 25.5 24.9 24.3 2.7 -0.8 1.7 -2.8 3.3 -1.2 Men Lowest Quintile 3.8 3.9 4.0 4.0 4.1 4.0 4.0 4.0 4.0 4.0 3.9 4.1 4.2 0.0 0.0 0.0 0.2 -0.1 0.3 Second Quintile 9.2 9.4 9.4 9.5 9.7 9.2 9.3 9.1 9.3 9.3 9.0 9.2 9.3 -0.1 -0.1 -0.3 0.5 -0.7 0.3 Third Quintile 14.6 14.8 14.7 14.8 15.1 14.2 14.3 14.1 14.4 14.3 13.9 14.2 14.3 -0.2 0.1 -0.4 0.6 -1.2 0.4 Fourth Quintile 21.6 21.9 21.5 21.6 22.3 21.1 21.1 20.9 21.4 21.3 20.8 21.1 21.3 -1.0 0.2 -0.6 0.7 -1.5 0.5 81-95% 25.3 25.7 25.7 25.9 26.9 25.4 25.8 25.8 26.3 26.2 25.8 26.1 26.0 -1.3 0.7 -0.7 1.6 -1.1 0.2 Top 5% 25.5 24.3 24.7 24.3 22.0 26.0 25.4 26.2 24.6 25.0 26.6 25.3 24.8 2.6 -0.9 1.9 -3.5 4.6 -1.8 Women Lowest Quintile 3.9 4.1 4.0 4.1 4.2 4.2 4.1 4.1 4.0 4.0 4.1 4.1 4.1 -0.4 0.0 0.0 0.3 -0.1 0.0 Second Quintile 9.6 9.7 9.7 9.6 9.9 10.0 9.6 9.9 9.6 9.8 9.7 9.5 9.8 -1.2 0.0 -0.2 0.3 -0.1 0.0 Third Quintile 15.3 15.5 15.5 15.2 15.6 15.8 15.1 15.5 15.2 15.5 15.3 15.0 15.3 -1.0 -0.1 -0.4 0.3 -0.3 0.0 Fourth Quintile 23.0 23.1 23.1 22.6 23.2 23.1 22.3 22.9 22.4 22.8 22.6 22.4 22.6 0.0 0.1 -0.6 0.2 -0.6 0.0 81-95% 26.9 27.0 26.9 26.4 27.3 27.0 26.2 26.7 26.5 27.1 26.9 26.6 26.5 1.2 0.0 -0.4 0.4 -0.4 -0.3 Top 5% 21.4 20.7 20.8 22.1 19.8 19.9 22.7 20.9 22.2 20.8 21.4 22.5 21.7 1.5 0.0 1.5 -1.5 1.5 0.3 Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Note: Estimates are for persons age 16 and over. CRS-50 Table 9. Share of Total Weekly Earnings by Quintile, Full-Time, Year-Round Workers, 1979-2007 (percent) Percentile 1979 1980 1981 1982 1983 1984 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 7.3 12.4 16.9 23.0 24.5 15.9 7.4 12.4 17.0 23.2 24.5 15.4 7.3 12.3 17.1 23.2 24.7 15.5 7.2 12.2 16.9 23.0 24.9 15.7 7.0 12.3 16.9 23.2 25.0 15.6 6.9 12.2 17.0 23.3 25.2 15.4 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 7.5 13.1 17.6 22.7 23.7 15.3 7.6 13.2 17.8 22.8 23.7 14.9 7.4 13.0 17.7 23.1 23.9 14.9 7.2 12.8 17.5 23.0 24.5 15.1 7.0 12.8 17.6 23.1 24.6 15.1 6.8 12.7 17.6 23.3 24.7 14.8 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 9.2 14.4 18.2 22.9 23.0 12.4 9.1 14.5 18.1 23.0 23.1 12.3 9.0 14.3 18.2 23.2 23.3 12.0 8.7 14.0 18.0 23.2 23.3 12.7 8.5 14.0 18.0 23.3 23.5 12.7 8.3 13.7 18.0 23.4 23.7 12.9 1985 1986 1987 1988 All Full-Time, Year-Round Workers 6.9 6.7 6.8 6.7 12.0 11.9 11.9 11.9 16.8 16.7 16.6 16.6 23.0 22.9 22.9 22.8 24.9 24.9 24.9 24.8 16.4 16.9 16.9 17.1 Men 6.8 6.6 6.7 6.7 12.4 12.3 12.2 12.2 17.2 17.1 17.1 17.0 23.0 22.8 22.8 22.6 24.4 24.4 24.4 24.5 16.2 16.8 16.8 17.0 Women 8.3 8.0 7.9 7.8 13.6 13.3 13.4 13.2 17.9 17.8 17.7 17.6 23.5 23.4 23.2 23.2 23.8 23.9 23.9 24.1 12.9 13.5 13.8 14.0 1989 1990 1991 1992 1993 1994 6.6 11.8 16.3 22.5 24.7 18.1 6.7 11.8 16.4 22.6 24.9 17.6 6.7 11.9 16.5 22.8 25.0 17.0 6.7 11.8 16.5 22.6 24.9 17.5 6.3 11.2 15.7 21.7 24.3 20.8 6.2 11.0 15.5 21.6 24.5 21.1 6.6 11.9 16.5 22.3 24.5 18.2 6.6 11.9 16.6 22.5 24.7 17.8 6.6 12.0 16.7 22.7 24.9 17.0 6.5 11.8 16.6 22.5 24.9 17.7 6.1 11.1 15.6 21.5 24.1 21.5 6.0 10.9 15.5 21.5 24.4 21.8 7.7 13.1 17.5 23.2 24.2 14.2 7.8 13.1 17.6 23.3 24.1 14.1 7.7 13.0 17.5 23.2 24.2 14.4 7.6 13.0 17.7 23.2 24.3 14.2 7.2 12.6 17.0 22.7 24.0 16.5 7.1 12.3 16.8 22.6 24.2 17.0 CRS-51 Percentile 1995 1996 1997 1998 1999 2000 2001 2002 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 6.3 11.1 15.6 21.8 24.6 20.7 6.3 11.1 15.3 21.4 24.4 21.5 6.3 11.1 15.4 21.4 24.4 21.4 6.3 11.1 15.5 21.5 24.6 21.1 6.3 11.2 15.7 22.0 25.5 19.3 6.1 10.8 15.1 21.2 24.6 22.2 6.1 10.7 14.9 20.9 24.6 22.7 6.2 10.8 15.0 21.1 25.0 22.0 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 6.1 11.0 15.5 21.5 24.3 21.7 6.0 10.9 15.3 21.2 24.2 22.3 6.1 11.0 15.3 21.1 24.3 22.2 6.1 11.0 15.4 21.3 24.7 21.6 6.2 11.2 15.7 22.0 25.4 19.6 5.9 10.5 14.8 21.0 24.4 23.5 5.9 10.5 14.7 20.8 24.5 23.5 5.9 10.5 14.8 21.0 25.0 22.9 Lowest Quintile Second Quintile Third Quintile Fourth Quintile 81-95% Top 5% 7.2 12.5 17.0 22.8 24.6 15.9 7.3 12.3 16.5 22.2 24.2 17.5 7.3 12.3 16.7 22.4 24.3 17.1 7.2 12.2 16.6 22.2 24.3 17.4 7.1 12.3 16.9 22.7 24.8 16.2 7.1 12.4 16.7 22.5 24.6 16.7 7.0 11.9 16.1 21.8 24.2 19.0 7.1 12.1 16.3 22.1 24.4 17.9 Change in Change in Change in Change in Change in Change in Percent, Percent, Percent, Percent, Percent, Percent, 2003 2004 2005 2006 2007 1980-1989 1989-1992 1993-1995 1995-1999 1999-2005 2005-2007 All Full-Time, Year-Round Workers 6.2 6.1 6.1 6.0 6.3 -0.8 0.0 0.0 0.0 -0.2 0.2 10.9 10.8 10.6 10.6 10.9 -0.7 0.0 -0.1 0.1 -0.6 0.3 15.1 15.0 14.9 14.9 15.3 -0.8 0.3 -0.1 0.2 -0.8 0.4 21.3 21.2 21.1 21.1 21.5 -0.7 0.1 0.1 0.2 -0.9 0.4 25.2 25.0 25.1 25.1 25.3 0.2 0.2 0.3 0.9 -0.4 0.2 21.4 21.8 22.1 22.4 20.7 2.6 -0.6 -0.2 -1.4 2.9 -1.4 Men 6.0 5.8 5.8 5.8 6.1 -1.0 -0.1 0.0 0.1 -0.4 0.3 10.6 10.5 10.3 10.3 10.6 -1.3 -0.1 -0.1 0.2 -0.9 0.3 15.0 14.9 14.7 14.8 15.2 -1.2 0.1 -0.1 0.2 -1.0 0.5 21.3 21.0 20.9 20.9 21.5 -0.5 0.2 0.0 0.5 -1.1 0.6 25.3 25.1 25.0 25.2 25.4 0.7 0.4 0.2 1.1 -0.3 0.3 21.8 22.7 23.4 22.9 21.3 3.3 -0.5 0.1 -2.1 3.8 -2.1 Women 6.9 6.9 7.0 6.8 7.1 -1.4 -0.1 0.1 -0.1 -0.2 0.1 12.0 12.0 11.8 11.5 11.9 -1.4 -0.1 -0.1 -0.2 -0.5 0.1 16.2 16.3 16.3 15.8 16.2 -0.6 0.1 -0.1 -0.1 -0.6 0.0 22.0 22.1 22.2 21.7 22.0 0.2 0.0 0.1 -0.2 -0.4 -0.2 24.4 24.7 24.9 24.5 24.6 1.2 0.1 0.6 0.2 0.1 -0.3 18.4 17.9 17.8 19.7 18.2 1.9 -0.1 -0.6 0.3 1.6 0.4 Source: Calculated by CRS from the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS). Note: Estimates are for persons age 16 and over.