	Introduction

Wage earnings are the largest source of income for many workers, and wage gains are a primary lever for raising living standards. Appendix A provides details on the methodology used in this report. In summary, analysis of the data shows that overall wages rose in real terms over the 1979 to 2017 period at the top of the wage distribution, increased slightly at the middle of the wage distribution, and rose to an even lesser degree at the bottom of the distribution. Differential patterns of wage growth narrowed the gap between median earnings of men and women (i.e., the gender wage gap), but other wage gaps did not show such change over time. Real wages fell for workers with lower levels of educational attainment (i.e., a high school degree or less) and rose for highly educated workers, contributing to a wage gap between workers with different educational attainment that grew markedly over the 1979 to 2000 period and has plateaued since then . Occupational composition of worker groups appears to matter as well and may explain the failure of education alone to raise wages for some groups. Real Wage Trends

This section describes trends in real hourly wages over the 1979 to 2017 period at selected wage percentiles for nonmilitary, nonfarm workers between the ages of 25 and 64; wage patterns are disaggregated by sex, race, Hispanic ethnicity, and education. Median wage trends were not uniform across demographic groups, with wages decreasing for some groups (e.g., men and Hispanic workers) but increasing for others (e.g., women). While median wages for white men rose by 2.5%, from $25.33 to $25.96, over the 1979 to 2017 period, median wages for black and Hispanic men fell. The wage gap between black and white workers grew, as did the gap between median-wage Hispanic workers and median-wage non-Hispanic workers. Wages by Educational Attainment: The College Premium

The rise in real hourly wages for workers with higher levels of educational attainment stands out among wage trends over the 1979 to 2017 period. Skilled Trades

The previous section highlighted the strong wage growth experienced by workers with at least a bachelor's degree (relative to workers with a high school degree or less education) over the 1979 to 2000 period, and the high and sustained wage premium for these workers thereafter (see Figure 4 ). Worker Characteristics by Wage Group

 Table 1 shows a general pattern of strong wage growth at the top of the wage distribution over the 1979 to 2017 period, with slower growth or falling wages at the median and bottom of the distribution. Shifts in occupation may affect wage trends as well. Overall, the analysis shows the following:
Workers were more likely to have completed a bachelor's or advanced degree in 2017 than workers in 1979, with the gains in educational attainment being particularly large for workers in the highest wage group. But educational gains do not translate into wage growth for all groups. High-Wage Workers

Although wage patterns varied across demographic groups for low-wage and middle-wage workers, wages grew in real terms at the 90 th percentile for all groups over the 1979-2017 period. Technological change, international trade, immigration and other factors affecting labor supply changes, along with the quality of job matches are among the key market factors thought to contribute to recent wage trends. Technological change can affect wage patterns by changing employers' demand for certain groups of workers. Where new technology raises workers' productivity (often for high-skilled workers)—and their value to employers—demand will rise, and put upward pressure on wages. For example, social and economic change dramatically increased women's labor supply in the latter half of the last century. At the same time, changes in pay-setting practices in certain high-pay occupations, the emergence of superstar earners (e.g., in sports and entertainment), and other factors may have improved wage growth for some workers at the top of the wage distribution.
Wage earnings are the largest source of income for many workers, and wage gains are a primary lever for raising living standards. Reports of stagnant median wages have therefore raised concerns among some that economic growth over the last several decades has not translated into gains for all worker groups. To shed light on recent patterns, this report estimates real (inflation-adjusted) wage trends at the 10th, 50th (median), and 90th percentiles of the wage distributions for the workforce as a whole and for several demographic groups, and it explores changes in educational attainment and occupation for these groups over the 1979 to 2017 period.
Key findings of this report include the following:
Real wages rose at the top of the distribution, whereas wages stagnated or fell at the bottom. Real (inflation-adjusted) wages at the 90th percentile increased over 1979 to 2017 for the workforce as a whole and across sex, race, and Hispanic ethnicity. However, at the 90th percentile, wage growth was much higher for white men and women and lower for black and Hispanic men. By contrast, middle (50th percentile) and bottom (10th percentile) wages grew to a lesser degree (e.g., women) or declined in real terms (e.g., men). The gender wage gap narrowed, but other gaps did not. From 1979 to 2017, the gap between the women's median wage and men's median wage became smaller. Gaps expanded between the median wages for black and white workers and for Hispanic and non-Hispanic workers over the same period. Real wages fell for workers with lower levels of educational attainment and rose for highly educated workers. Wages for workers with a high school diploma or less education declined in real terms at the top, middle, and bottom of the wage distribution, whereas wages rose for workers with at least a college degree. The wage value of a college degree (relative to a high school education) increased markedly over 1979-2000. The college wage premium has leveled since that time, but it remains high. High-wage workers, as a group, benefited more from the increased payoff to a college degree because they are the best educated and had the highest gains in educational attainment over the 1979 to 2017 period. Education and occupation patterns appear to be important to wage trends. Worker groups studied in this report were more likely to have earned a bachelor's or advanced degree in 2017 than workers in 1979, with the gains in college degree attainment being particularly large for workers in the highest wage groups. For some low- and middle-wage worker groups, however, these educational gains were not sufficient to raise wages. Occupational categories of workers appear to matter as well and may help explain the failure of education alone to raise wages.
The focus of this report is on wage rates and changes at selected wage percentiles, with some attention given to the potential influence of educational attainment and the occupational distribution of worker groups on wage patterns. Other factors are likely to contribute to wage trends over the 1979 to 2017 period as well, including changes in the supply and demand for workers, labor market institutions, workplace organization and practices, and macroeconomic trends. This report provides an overview of how these broad forces are thought to interact with wage determination, but it does not attempt to measure their contribution to wage patterns over the last four decades. For example, changes over time in the supply and demand for workers with different skill sets (e.g., as driven by technological change and new international trade patterns) is likely to affect wage growth. A declining real minimum wage and decreasing unionization rates may lead to slower wage growth for workers more reliant on these institutions to provide wage protection, whereas changes in pay-setting practices in certain high-pay occupations, the emergence of superstar earners (e.g., in sports and entertainment), and skill-biased technological changes may have improved wage growth for some workers at the top of the wage distribution. Macroeconomic factors, business cycles, and other national economic trends affect the overall demand for workers, with consequences for aggregate wage growth, and may affect employers' production decisions (e.g., production technology and where to produce) with implications for the distribution of wage income. These factors are briefly discussed at the end of the report.