Introduction
Wage earnings are the largest source of income for many workers, and wage gains are a primary lever for raising living standards. As such, evidence that long-term wage growth (since 1980) has stagnated among low- and middle-wage workers has been viewed with concern and raised questions about the patterns and drivers of these trends.1 More recent wage trends, however, tell a somewhat different story.
Wages for adult workers (between the ages of 25 and 64) rose in real terms (i.e., as adjusted for inflation) throughout the wage distribution over the 2014-2024 period. The 10th percentile wage (i.e., lower-wage workers) grew in real terms over the period and had a higher rate of cumulative growth than wages at the 50th and 90th percentiles. While many factors affect wage patterns, recent wage growth at the bottom of the distribution has been attributed in part to rising state-level minimum wages and unusually competitive conditions in lower-wage labor markets.
Wage growth rates were not constant over the 2014-2024 period. Wages rose in the years leading up to the COVID-19 pandemic, spurred in part by tightening labor market conditions and increased further during the early pandemic period. Wage growth subsequently slowed overall, but remained strong for workers at the 10th percentile during the post-pandemic period.
This report explores hourly wage trends for adult workers over the 2014-2024 period as a whole, and during three subperiods centered around the COVID-19 pandemic. It opens with a discussion of labor market conditions over the period and how CRS selected the three subperiods for analysis. It then presents hourly wage trends and patterns in aggregate and for selected demographic groups and geographic regions. The report closes with a discussion of labor market factors that may have contributed to the observed trends.
Evolving Labor Market Conditions and Periods of Analysis
This report describes quarterly wage trends and patterns over the 2014-2024 period for workers at the 10th, 50th, and 90th percentiles of the hourly wage distribution.2 To better observe the evolution of wage growth over this period, the report presents estimated wage growth rates for these percentiles during the following three subperiods:
- the pre-pandemic period from the first calendar quarter of 2014 (Q1-2014) to Q1-2020;3
- the pandemic period from Q2-2020 to Q2-20224; and
- the post-pandemic period from Q3-2022 to Q4-2024.
These subperiods were selected based on both the timing of the pandemic and broad labor market patterns over 2014 to 2024 (Figure 1): a strong and tightening labor market in the pre-pandemic period, a period of considerable labor market disruption and recovery starting with the onset of the COVID-19 pandemic, and a return to more stable patterns starting around the middle of 2022 (the beginning of the post-pandemic period). (Additional discussion of labor patterns over these periods is in the text box "Labor Market Evolution over Three Periods.")
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Source: CRS analysis of Bureau of Labor Statistics (BLS) data. Notes: Data are seasonally adjusted. The average hourly wage of private sector employees is adjusted for inflation using the BLS Consumer Price Index for All Urban Consumer (CPI-U). |
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Labor Market Evolution over Three Periods Figure 1 presents four headline labor market indicators published by the Bureau of Labor Statistics (BLS): (1) payroll employment (i.e., the number of jobs); (2) the national unemployment rate; (3) the quit rate, which measures workers' voluntary job separations; and (4) the average hourly wage for private sector workers, adjusted for inflation by CRS. Pre-pandemic Period: Increasingly Tight Labor Market Job numbers grew steadily over the Q1-2014 to Q1-2020 period—nearly 3 million jobs were added per year, on average, as the unemployment rate fell from 6.6% in January 2014 to 3.5% in February 2020. The job quit rate grew over the same period, suggesting that workers felt increasingly confident about their job prospects, and average hourly wages increased in real (inflation-adjusted) terms. Pandemic Period: Massive Labor Market Disruption Followed by a Partial Rebound and Recovery The onset of the COVID-19 pandemic dramatically decreased employment in early 2020 as businesses closed or reduced operations and consumer demand shifted away from in-person commerce. The swift decline in economic activity translated into widespread and massive job losses (22 million jobs were lost between March and April 2020, the largest one-month loss since the data series' start in 1939) and the economy fell into a brief but deep recession. Employment rebounded partially starting in May 2020, as many workers on temporary layoff were recalled and other non-employed workers found new jobs. The pace of employment growth slowed thereafter, and gradually approached pre-pandemic employment levels by early 2022. Unemployment and quit rate patterns similarly illustrate a sharp downturn, followed by a relatively rapid recovery period. The unemployment rate jumped sharply to 14.8% in April 2020, followed by a quick and steady drop to 6.8% by October 2020 and to 3.6% in March 2022. The quit rate also rebounded quickly, but instead of returning to pre-pandemic trends, it continued to rise to its series high of 3.3% in November 2021. It fluctuated around that point until about May 2022, when it started to decline. Average hourly wages spiked in April 2020, reflecting in large part the disproportionate loss of lower-wage jobs in the early months of the pandemic, and possibly higher wages paid by employers to compensate workers for increased health risks (i.e., hazard pay).5 Average wages for private sector workers began a downward trend in June 2020 that lasted through June 2022. Wage trends during the pandemic period were not uniform across worker groups, however. As shown in Figure 1, average wages for leisure and hospitality workers (a lower-pay sector) trended upward over during most of 2021, whereas wages for private sector workers as a whole fell. Post-Pandemic Period: A Readjusted Labor Market Payroll employment reached its pre-pandemic level by June 2022 and has increased thereafter at more typical growth rates. Similarly, in July 2022 the unemployment rate dropped to its pre-pandemic rate of 3.5% and remained there until the middle of 2023, when it ticked upward slightly. The quit rate started to fall in May 2022 after peaking in November 2021 and fluctuating around that point in the ensuing months. Starting in mid-2022, average hourly wages grew at rates similar to the pre-pandemic period. |
Recent Wage Trends and Wage Growth
Figure 2 illustrates real (inflation-adjusted) hourly wage growth trends for adult workers from 2014 through 2024, by percentile and calendar quarter.6 The line graph on the left side of the figure shows cumulative wage growth at the 10th, 50th, and 90th percentiles since Q1-2014. The bar chart on the right presents average quarterly over-the-year wage growth for these percentiles within the pre-pandemic, COVID-19 pandemic, and post-pandemic periods.7
Wages increased in real terms over the 2014 to 2024 period at each of the selected percentiles (Figure 2, left panel). Cumulative real wage growth was 23.0% (1.9% annualized) for workers at the 10th percentile of the wage distribution, 12.4% (1.1% annualized) for workers at the median, and 15.4% (1.3% annualized) for workers at the 90th percentile. In dollar terms, CRS estimates that the 10th percentile wage for the aggregate adult workforce increased from about $13.00 per hour in 2014 (about $26,000 per year for a full-time worker) to $16.00 per hour in 2024 (about $32,000 per year for a full-time worker).8 Over the same period, the median adult wage increased from about $26.00 per hour to $29.00 per hour, and the 90th percentile wage for adult workers increased from about $61.00 per hour to nearly $70.00 per hour.
Wage growth patterns varied over the period and across the selected percentiles (Figure 2, right panel). At each of these percentiles, average real wage growth during the pandemic period was higher than in the pre-pandemic period, and considerably lower in the post-pandemic period. Average wage growth at the 10th percentile was relatively strong and outpaced average growth at the median and 90th percentile, especially during the pandemic.9
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Figure 2. Real Wage Growth Rates at the 10th, 50th, and 90th Percentiles |
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Source: CRS estimates using Current Population Survey Outgoing Rotation Group data for 2014-2024. Notes: Quarterly wage estimates are smoothed using a four-quarter moving average. Quarterly over-the-year growth measures the percentage change between a given quarter and the same quarter in the previous year; for example, (Q1, 2020-Q1, 2019)Q1, 2019. The data sample comprises 25- to 64-year-old workers, employed at the time of the survey in nonfarm, nonmilitary wage and salary jobs during the survey week, and who reported enough information to compute an hourly wage. Wage growth rates are based on inflation-adjusted wages. Wages are adjusted for inflation using the Bureau of Labor Statistics Current Price Index for All Urban Consumers (CPI-U); https://www.bls.gov/cpi/. |
Wage Patterns for Selected Demographic Groups
Figure 3 presents real wage (level) trends for adult workers by demographic group, and illustrates differences in the levels and dispersion of wages.10 Wage levels were highest at each of the percentiles shown for men, White (non-Hispanic) workers and Non-Hispanic workers generally. Wage distributions for some groups were also more compressed than others, generally because the median and 90th percentile wages of such groups are relatively low.11 This was the case for Black workers, Hispanic workers, and women. For example, whereas the gaps between the 90th and 10th percentiles (90-10 gap) in Q1-2024 were $56.50 and $57.60 for White workers and non-Hispanic workers respectively, they were $40.60 and $34.20 for Black workers and Hispanic workers. The 90-10 gap in Q1-2024 was $64.20 for men and $48.40 for women.
Figure 4 presents quarterly wage trends and average wage growth over the pre-pandemic, pandemic, and post-pandemic periods for adult workers in the selected demographic groups. Similar to the aggregate labor market, high wage growth at the 10th percentile stands out. In some cases, however, growth patterns for individual subgroups did not mirror those for the aggregate workforce. For example, pandemic-period wage growth rates for Black (non-Hispanic) workers were elevated only at the 10th percentile, and post-pandemic wage growth was higher than pre-pandemic wage growth at the 10th and 50th percentiles, with little variation at the 90th percentile.
As in the aggregate workforce, strong relative wage growth at the 10th percentile narrowed the percentage wage gap between high (90th percentile) and low (10th percentile) earners within all demographic groups between 2014 and 2024, but groups varied by the degree of decreased inequality. However, with the exception of Hispanic workers, the percentage gap between the 90th percentile wage and the 50th percentile wage increased (i.e., wage growth among high earners continued to outpace wage growth for workers in the middle of the distribution).
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Source: CRS estimates using Current Population Survey Outgoing Rotation Group data for 2014-2024. Notes: See notes at Figure 2. Gray bars indicate the 2020 recession. |
Wage Gaps at Selected Percentiles
Differences in demographic groups' wage levels and wage growth rates—shown in Figure 3 and Figure 4, respectively—had implications for wage inequality over the 2014-2024 period. These differentials are illustrated in Figure 5, which plots relative wage ratios at the 10th, 50th, and 90th percentiles for selected demographic groups (the gray dotted line in each figure illustrates the linear trend over the period).
At the 10th percentile, Black workers' wages increased as a percentage of White workers' wages over the 2014-2024 period (from 84.4% to 87.0%), driven in large part by relative gains experienced by Black workers starting in 2022. Wage ratio trends at the 10th percentile for women (relative to men) and Hispanic workers (relative to non-Hispanic workers) were comparatively flat.12
Wage differentials at the median narrowed over the period, particularly for Hispanic workers and Black workers. Hispanic workers' median wage increased from 68.7% to 72.7% as a share of non-Hispanic workers' median wage, and Black workers' median wage increased from 74.5% to 77.6% as a share of White workers' median wage. The increase in women's median wage as a share of men's median wage was less pronounced.
Trends at the 90th percentile were slightly negative for each comparison group across the entire period, meaning that between-group inequality for high earners increased on average. Since 2023, however, the groups' relative wage ratios at the 90th percentile have increased; as a result, ratios in Q4-2024 were higher than in Q1-2014 for the selected comparison groups.
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Source: CRS estimates using Current Population Survey Outgoing Rotation Group data for 2014-2024. Notes: See notes at Figure 2. All graphics use the same scale: 60%-90% on vertical axis, and calendar quarters from Q1-2014 to Q4-2024 on the horizontal axis. A linear trendline is shown as a gray dotted line. |
Wage Patterns by Education Level
Workers with at least a bachelor's degree earned considerably more than workers without a bachelor's degree (i.e., workers with some years of college or an associate's degree, or workers who did not extend their education beyond high school), and their wage distribution was more dispersed (Figure 6). In Q1-2024, wages for top earners (90th percentile) with at least a bachelor's degree ($95.70 per hour) were nearly double those of their counterparts with some college ($49.10 per hour) and more than double those with a high school diploma or less schooling ($37.90 per hour).13 The dispersion of wages, as measured by the gap between the 90th percentile wage and the 10th percentile wage was $75.70 for college-educated workers,14 $33.60 for workers with some college but not a bachelor's degree, and $24.00 for workers with a high school diploma or less education.
Echoing the trends for demographic groups discussed in the previous section, 10th percentile wage growth was relatively strong in the pre-pandemic period for all education groups and increased during the pandemic (Figure 7). During the post-pandemic period, wage growth at the 10th percentile remained strong only for high-school-educated workers. Median wages grew at higher rates during the pandemic, particularly for workers without a bachelor's degree, but decreased on average in the post-pandemic period. Wage growth at the 90th percentile increased during the pandemic for workers who continued their education past high school. It continued to be positive for bachelor's-degree-holders in the post-pandemic period, but declined on average for both other groups of workers.
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Source: CRS estimates using Current Population Survey Outgoing Rotation Group data for 2014-2024. Notes: See notes at Figure 2. Gray bars indicate the 2020 recession. |
Wage Patterns by Census Division
The section considers how recent wage patterns varied by geography, as measured by the nine Census Bureau divisions. The divisions are geographically proximate groups of states15 that were selected by the Census Bureau to be "units that are roughly similar in terms of historical development, population characteristics, economy, and the like" with the goal of providing "a larger geographic framework for comparative statistical analysis." 16 While providing a broad basis for geographic comparison, there are potentially wide variations in social, economic, and policy factors relevant to wage patterns within them (e.g., composition of employment, economic policies and environment, labor market institutions).17 This section does not attempt to adjust estimates for such differences.
Wage distributions and wage growth trends over the 2014-2024 period varied across Census divisions. These differences are illustrated in Figure 8, which plots wage levels at the selected percentiles in Q1-2014 and Q1-2024 for each division, and shows the change in wages (in constant 2024 dollars) at the selected percentiles over the same period. Wage increases ranged from $2.00 in the West South Central Census Bureau division to $4.40 in the Pacific Division at the 10th percentile, from $1.90 (East South Central) to $4.30 (Mountain) at the median, and from $6.80 (West North Central) to $18.30 (Pacific) at the 90th percentile.
Cumulative wage growth over the 2014-2024 period was strongest at the 10th percentile in all divisions, but these growth rates varied by location: from 17% (West South Central) to 33% (Pacific). Consequently, wage gaps between divisions for lower-wage workers increased. For example, the 10th percentile wage gap between the West South Central division and the Pacific division increased from $1.60 in 2014 to $4.00 in 2024.
Factors Influencing Prominent Wage Trends
Two patterns from the wage trends presented in the previous sections of this report are (1) the general increase in wage growth during the pandemic period, particularly in its early months, coupled with lower rates in the post-pandemic period; and (2) relatively strong and persistent wage growth among lower-wage workers. This section considers some potential drivers for these two patterns, but does not attempt to quantify or assess the relative contribution of factors.18
Growth Rates During the Pandemic and Post-pandemic Periods
Wage growth rates increased across the wage distribution during the COVID-19 pandemic, with a marked rise in its early months. This elevated growth was temporary at the 90th and 50th percentiles, but continued for lower-wage workers through the post-pandemic period (Figure 9). The marked rise in wage growth for each percentile during the first year of the pandemic and almost mirror-image decline in subsequent months is particularly visible, especially for the 50th and 90th percentile wages, and reflects in part the rapid change in employment composition in the early pandemic. Change in pay practices and work arrangements may also have played a role.
The Impact of the Pandemic on Employment Composition
The number of jobs dropped sharply in the early months of the COVID-19 pandemic, followed by a quick partial recovery and then a more gradual return to pre-pandemic numbers (Figure 1). Although job loss was widespread, some sectors were more affected than others and uneven losses changed the composition of employment (Figure 10).19 Industries with high job losses generally involved in-person services or commerce in group settings, which were discouraged by public health guidance or restricted by state laws in the early months of the pandemic.20
The differential patterns of job gains and losses matter to the wage distribution because large and persistent losses occurred in lower-paying industries.21 Together, establishments in the leisure and hospitality, social and civic organizations, health services (including child care), mining and logging, personal care services, and education services industries had net losses of nearly 1.5 million jobs (618,000 jobs on average per year) between February 2020 and July 2022. Of those net job losses, about 81% were in industries with average hourly wages below the overall average of $28.55 in February 2020. For example, the average hourly wage for the leisure and hospitality industry (409,000 net jobs lost on average per year) was $16.90 in February 2020. Mathematically, the disproportionate loss of lower-wage workers will cause the overall average wage rise, even if individual wage offers to the remaining workforce have not increased, and will shift some percentiles upward.22
Job growth bounced back in several industries late in the pandemic and in the post-pandemic period. Annual average gains in the education and health services and leisure and hospitality industries were both particularly strong.
Increased Pay in Response to the Pandemic
Wage growth during the pandemic may also reflect a change in compensation practices among some employers. According to the results of a special BLS survey, 14.5% of private sector establishments (20.5% of all private-sector employment) reported in 2021 that they had increased workers' base wages or salaries in response to the pandemic, and 5.5% of establishments (15.7% of all private-sector employment) had established a temporary hourly wage premium for work performed during pandemic (e.g., hazard pay or "hero" pay).23 Base wage increases were more common in some industries than others (e.g., 34.3% of accommodation and food service establishments reported base pay increases in 2021).24 Hazard pay was particularly prevalent in the health care and social assistance sector (12% of establishments in 2021) and accommodation and food services (11.4% of establishments in 2021).25 BLS has not updated this particular set of estimates, but some industry estimates and worker reports suggest that pandemic era pressures have eased to some extent and employers have reduced pay for some jobs more recently.26
Telework
Many workplaces responded to the COVID-19 pandemic by shifting from in-person to remote work.27 This practice stabilized employment for large shares of workers during the pandemic but telework was not equally available across occupations. For example, BLS reported that managers and professionals made up about 45% of employment in May 2020 and nearly 74% of those who teleworked due to the pandemic in that month; in contrast, service workers made up almost 14% of employment but only about 3% of those who teleworked for pandemic-related reasons.28 While many workers returned to the office late in the pandemic and during the post-pandemic period, at least for some days per week, elevated telework has persisted.29
Workers' continued demand for telework (including fully remote work in some cases) may have affected wage growth—particularly in the top half the distribution, where such work arrangements are more available. In particular, workers' preference for such work may have allowed some employers to recruit from a wider geographic area, perhaps providing some slack to firm-level labor markets and allowing employers to engage workers residing in lower cost of living areas.30 In addition, some workers with strong preferences for remote or hybrid arrangements may be willing to take lower compensation or accept lower wage growth as a tradeoff.
Elevated Wage Growth Among Low-Wage Workers
Another prominent trend was the strong and persistent wage growth among lower-wage workers over the entire 2014-2024 period. The 10th percentile wage grew in real terms over the period and had a higher rate of cumulative growth than the 50th and 90th percentiles starting in 2019 (Figure 9). This pattern is a notable break from longer-term trends. As illustrated in Figure 11, the 10th percentile wage declined in real terms from 1980 to the mid-1990s, after which point tight labor market conditions helped raise wages throughout the distribution into the early 2000s; annual average wage growth in the bottom half of the distribution slowed until 2013. Cumulative wage growth at the 10th percentile was lower than wage growth at the 50th and 90th percentiles over the entire 1980 to 2013 period.
Workers' ability to leverage their productive capacity into higher wages depends on their bargaining power, which in turn is determined by market factors (e.g., labor scarcity, worker mobility, labor market imperfections) and wage-setting institutions like the minimum wage and social norms regarding compensation. The results of some studies suggest that wage gains for lower-paid workers since 2014 may reflect recent shifts in such factors, namely state minimum wage policy and market conditions that affect the balance of employers' and workers' bargaining power.31
State Minimum Wages
Although the federal minimum wage has not increased since it was set by Congress at $7.25 per hour in 2009, many states have enacted minimum wage rates above the federal rate and increased their minimum wage rates over the 2014-2024 period.32 Figure 12 shows that the number of states with minimum wage rates above $7.25 per hour increased from 24 to 30 between 2014 and 2015, and to 31 by 2021, where it has remained since that time.33 Many, but not all, of these states also implemented annual rate adjustments causing the average state minimum wage (in states with a higher minimum wage) to rise from $8.20 per hour in 2014 to $13.20 per hour in 2024 (i.e., 61% cumulative growth in the state minimum wage, [4.9% growth annualized]). This increase in state minimum wage rates is most meaningful to workers in lower-wage jobs (i.e., those employed at or near the federal or applicable state minimum wage), with some potential for spillover.34
Figure 13 illustrates a potential correlation between state minimum wage policy and wage growth for workers at the bottom of the wage distribution.35 The figure plots cumulative real wage growth relative to Q1-2020 at selected percentiles for states with hourly minimum wage rates above the federal minimum wage rate in 2019 (left panel) and states in which the federal minimum wage is the wage floor (right panel). The figure shows, for example, that the 10th percentile wage in states with a minimum wage set above the federal rate increased by nearly 10% between Q1-2020 and Q1-2021, while it increased by about 4.2% in states in which the federal minimum wages is the wage floor.
Prior to the pandemic, 10th percentile wage growth (relative to Q1-2020) was higher in states with an hourly wage minimum wage above the federal rate; the growth rate for this percentile was higher both in absolute terms and relative to growth at the 50th and 90th percentiles.36 Wage growth at the 10th percentile continued in both groups of states in the post-pandemic period, but 10th percentile wage growth outpaced growth at the 50th and 90th percentiles to a greater extent in states where the federal minimum wage is the wage floor. Together, these patterns suggest that while state-level minimum wage policies may have played a role in supporting growth at the bottom of the distribution over the 2014-2024 period overall, other drivers have also contributed to recent wage trends, particularly late in the pandemic and in the post-pandemic period.
Increased Competition for Workers in Traditionally Lower-Wage Sectors
Many workers reconnected with their employers or found other work within a few months of the pandemic's onset: by September 2020 more than half of jobs lost in April 2020 had been recovered and jobs gains continued thereafter at a more gradual pace.37 At the same time job quit rates were on the rise, including in lower-paying industries, and employers faced an increasingly tight labor market.38
Elevated quit rates raised some concerns about a cultural shift in workers' attitudes about work, with some observers declaring "a Great Resignation."39 However ongoing job growth and rising labor force participation suggested that most workers were not permanently exiting the labor market, but were quitting their jobs to take up better work opportunities (i.e., a "Great Reshuffling" of workers). 40 Workers' ability to do so was supported by increasingly competitive labor markets (i.e., increased competition among employers for workers) and perhaps a greater willingness to change jobs, which together increased workers' job prospects.41 These reallocation patterns are illustrated broadly in Figure 14, which shows the concurrent rise in job quit rates, workers' movement to new employers, and particularly high wage growth for job movers.
Research suggests that these patterns may be relevant to explaining post-pandemic wage patterns for lower-wage workers, some of whom were able to increase their hourly wage by moving from lower- to higher-paying jobs, and in some cases moving to higher-paying industries.42 This was especially true for young workers without a college degree, whose employment has traditionally been concentrated in lower-paying jobs with less career mobility. As a result, wages toward the bottom of the wage distribution increased in both absolute terms and relative to middle- and higher-paying jobs.
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Figure 14. Worker Mobility and Median Wage Growth for Job-Stayers and Job-Movers |
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Source: Quit rate by industry: CRS analysis of BLS Job Openings and Labor Turnover Survey (JOLTS) data. Employer-to-employer transitions: Federal Reserve Bank of Philadelphia, Fujita, Moscarini, and Postel-Vinay Employer-to-Employer Transition Probability, https://www.philadelphiafed.org/surveys-and-data/macroeconomic-data/employer-to-employer-transition-probability. Median wage growth: Federal Reserve Bank of Atlanta, Wage Growth Tracker, https://www.atlantafed.org/chcs/wage-growth-tracker. Notes: The top panel plots the job quit rate relative to the industry-specific rate in February 2020. Rates are the three-month moving average of quit rates. The middle panel plots the estimated number of workers who changed employers as a percentage of total employment in the previous month; data are seasonally adjusted. The bottom panel plots the median rate of nominal wage growth in each month over a 12-month period. Calculations are based on individuals who were employed at both the start and the end of the 12-month period. Nominal wage growth does not account for inflation. |
Appendix. Methods
This report uses data from the Current Population Survey (CPS) Outgoing Rotation Groups (ORGs) to estimate quarterly hourly wage distributions over the 2014-2024 period. The CPS is a large-scale household survey conducted monthly by the Census Bureau. CPS participants are interviewed for four consecutive months, leave the survey for eight months, and then reenter the survey for a final four months. The ORGs are made up of respondents completing their fourth month in the survey (i.e., before they go out on the eight-month hiatus) and those completing their eighth and final interview. Unlike other CPS groups, the ORG respondents are asked about their usual earnings and hours worked, making them a particularly useful sample for hourly wage studies.
This report's sample comprises individuals 25 to 64 years old who were employed in nonfarm, nonmilitary wage and salary jobs during the survey week and reported enough information to compute an hourly wage. Excluded from the sample are self-employed workers, members of the Armed Forces, workers in agricultural occupations, and workers whose wages were imputed by the Census Bureau. As other analysts have done, CRS excluded Census-imputed wages due to a finding that a large portion of them were imputed with error.43
CRS estimates hourly wages by dividing workers' usual weekly earnings by their usual weekly hours of work. For workers who report they are paid by the hour, their reported hourly rate of pay was used. Wages represent earnings before deductions.44 Wages are weighted by the product of a worker's CPS-ORG weight and their usual weekly hours (i.e., wages are hours-weighted).
For most years in the 2014-2024 period, CPS earnings data are top-coded—that is, any reported earnings above a given top-code value are replaced with the top-code value—to reduce the likelihood that any particular survey respondent can be identified in the data. Although necessary to maintain the anonymity of survey respondents, top-coding is problematic to studies that attempt to characterize the wage distribution. Researchers have addressed top-coded values using a variety of methods. In this report, CRS follows the Center for Economic and Policy Research's (CEPR's) method by modeling earnings as having a log-normal distribution and replacing top-coded values with gender-specific estimates of the mean value of weekly earnings above the top-code value.45
Following standard practice, wage outliers (i.e., implausibly low or high wage reports) were addressed by excluding wages that were less than $0.50 in 1989 dollars and greater than $150 in 1989 dollars. Hourly wages were adjusted for inflation using the Consumer Price Index for All Urban Consumers, U.S. City Average (CPI-U).46 Specifically, they were converted to 2024 dollars.