For decades, the story was simple: The gap between the rich and the poor grew ever-wider as incomes increased faster at the top than the bottom. The story was true, too. Wages have been rising faster for the top 5 percent than for the bottom 20 percent almost every year this century.
But in a remarkable reversal, annual wage growth has been greater (as a percent) for the poor than for the rich in the last few years. A new report by the left-leaning Economic Policy Institute found that wages grew faster in 2016 for the poorest quintile than for the richest. The trend was particularly pronounced for white workers. The poorest 10 percent of white workers collectively saw a 5.1 percent raise in 2016, twice as faster as the 2 percent growth among the richest decile percent.
This good news isn’t just an artifact of a single think tank’s artisanal number crunching. The Atlanta Fed has also found that the three-month moving average of wage growth reached a post-recession high in November 2016. Non-white incomes have recently been growing faster than whites’, reversing yet another post-recession trend. And this might be the most surprising detail of all: Wages for high-school graduates are growing as fast as those for college grads for the first time since 1998, when the Atlanta Fed’s dataset begins.