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How to Fix the Economy in 13 Easy Charts

Policies that ensure broadly shared prosperity should be policymakers’ foremost priorities in 2014.

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Adapted from: “ Economy Built for Profits, Not Prosperity,” an EPI Economic Snapshot updated Dec. 6, 2013


After shrinking during the recession, the gap between CEO pay and typical worker wages is growing rapidly. The ratio of annual pay received by CEOs of the largest 350 U.S. firms relative to annual wages of production/nonsupervisory workers in those firms’ industries was roughly 20-to-1 in 1965, reached 100-to-1 by 1992, and peaked at 383-to-1 during the stock market bubble of 2000. In 2012, it was 273-to-1.

Adapted from:  CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners, an EPI report published June 26, 2013


While CEOs are doing fine in today’s economy, most other U.S. wage earners could badly use a raise—and not just to make up ground lost in the Great Recession. Essentially the bottom 70 percent of American workers have seen flat or falling real (i.e., inflation-adjusted) wages since 2002. The disproportionate income gains going to capital owners rather than workers have slowed the recovery, as a higher share of capital income is saved when it could instead be spent by workers and thus create more demand for goods and services.

Adapted from:  A Decade of Flat Wages: The Key Barrier to Shared Prosperity and a Rising Middle Class, an EPI report published Aug. 21, 2013


Wages and productivity grew in tandem during the three decades following World War II. But as EPI began pointing out in the 1994 edition of  The State of Working America, this link broke in the late 1970s for the vast majority of American workers. Productivity measures the average dollar value of economic output produced in an hour of work—essentially measuring the economy’s potential for providing rising living standards for all. But this potential has been unrealized for most American workers. Between 1979 and 2012, productivity rose 63.8 percent, but compensation per hour for production and nonsupervisory workers (who constitute 80 percent of the private-sector workforce) rose only 7.5 percent. As a result, an enormous share of economic output is going to profits and earnings of CEOs and other workers much higher up the wage scale—which is why American inequality has skyrocketed over the past generation.

Adapted from: “ Cumulative Change in Total Economy Productivity and Real Hourly Compensation of Production/Nonsupervisory Workers, 1948–2012,” an EPI Economic Indicator updated Sept. 4, 2013


It’s not just workers with less education who are failing to get their fair share of overall wage growth. For nearly the last quarter century, real wages for young workers with a four-year college degree have essentially stagnated.

Adapted from:  The Class of 2013: Young Graduates Still Face Dim Job Prospects, an EPI report published April 10, 2013


Sending American workers to computer programming school will not guarantee that their wages will keep pace with economy-wide growth. From 1994 to 2010, real wages for workers in computer occupations like computer programming and computer system design were essentially flat. Besides indicating that American wage problems are not due to workers’ lack of technical skills, wage trends in high-tech occupations also belie claims that the United States needs to give more visas to foreign tech workers because there aren’t enough here. If there were glaring labor shortages in tech sectors, tech-sector wages would be way up.

Adapted from:  Guestworkers in the High-Skill U.S. Labor Market, an EPI report published April 24, 2013


Every year that the minimum wage is not raised by Congress, its real value is reduced by inflation. This inaction has eroded living standards for low-wage workers. The real value of the minimum wage today, $7.25, is much lower than its height of $9.40 in 1968, despite the 109 percent rise in U.S. productivity since 1968. Today’s minimum wage would be $18.30 if it had grown at the same rate as U.S. productivity.

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