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Like many countries around the world, the United States is working to reduce wage inequality. Labor shortages in various sectors have prompted companies to raise salaries. This has benefited the country's most disadvantaged social groups.
Like many countries around the world, the United States is working to reduce wage inequality. Labor shortages in various sectors have prompted companies to raise salaries. This has benefited the country's most disadvantaged social groups.
Among them are young and Black Americans. These workers saw their pay rise dramatically in 2022 as a result of multiple pressures in the labor market. Full-time Black American wage earners took home 11.3% more in 2022 than the previous year, reports the Wall Street Journal, citing figures from the US Labor Department. Young people aged between 16 and 24 have seen their salaries increase by 10%.
The bottom 10% of US employees, those earning $570 a week, also saw an uplift of almost 10%. More generally, all income strata have been raised: the median weekly salary of workers jumped by 7.4% in 2022, according to the US Labor Department.
These wage increases have been welcomed by several economists who view it as fair compensation after "decades of pain," as Aaron Sojourner, an economist at the Upjohn Institute for Employment Research, told the Wall Street Journal. "It’s been a struggle for those folks to find a productive place in the community where they can contribute and earn and build families and success," he adds.
These increased salaries are all the more welcome in the current context of inflation. Indeed, consumer prices in the United States rose by 6.5% over the whole of 2022. That's less than wage growth over the same period. This trend is due to the US Federal Reserve's efforts to combat inflation in the country.
However, it is unlikely that pay increases will continue at this pace in 2023. Some companies may decide to adjust compensation or provide bonuses here and there to remain attractive. But these substantial wage increases are not sustainable over the long term in an overheating labor market. Indeed, several American tech stalwarts, such as Meta, Microsoft, Amazon and Google, have announced layoffs affecting thousands of employees in anticipation of the coming economic slowdown.
Nevertheless, the pay increases received by millions of Americans are not enough to offset wage inequality in the US. White and Asian workers continued to earn more than their African-American counterparts, according to the Wall Street Journal. Meanwhile, women received a median salary that was 82.9% that of men.
