The State of Working Wisconsin is....pretty good

The worker-focused High Road Strategies Center at UW-Madison released its Annual State of Working Wisconsin report ahead of Labor Day, and says Wisconsin employees are doing better than they have in quite a while.

In particular, the UW-Madison study says inflation-adjusted wage growth was quite strong in 2023, recovering almost all of what inflation took away in 2022, and returning to the uptrend that we saw from 2018 through 2021.

2023 wage increases largely make up for losses in 2022, when inflation spiked and workers’ pay did not keep up. Though nominal wages rose in 2022, inflation rose more rapidly peaking at 9.1% in June 2022. Both nationally and in Wisconsin, high inflation drove the 2022 purchasing power of the median wage below the 2021 level.

Inflation came down to 3% by mid-2023 and has hovered around this level since. As inflation cooled, wage growth surged, especially in Wisconsin. In Wisconsin, median wage growth was especially strong (from $22.93 to $23.90 over 2022-23). Nationally, wages rose but only slightly: up from $23.82 to $23.98. 2023 median wages in both Wisconsin and the U.S. sit just slightly below all-time highs set in 2021.

In addition, High Road Strategies says that in Wisconsin and in the nation as a whole, lower-wage workers have been doing better at beating inflation and improving their real pay in recent years, with the largest rate of wage growth since 2019.

From 2019 to 2023, wages of higher wage workers (workers who earn more than 80 percent of the workforce) grew modestly – Wisconsin wages are up less than 1% and national wages are up 2.5%. For lower wage workers (who earn more than 20 percent of the workforce) wages grew much more rapidly, surging 8.4% nationally and 8% in Wisconsin.

In the last four years, wage increases for lower wage workers are more than three times faster than higher wage workers’ gains. Lower wage workers have seized the opportunity provided by tight labor markets and moved to higher paying jobs and secured higher wages in jobs that they stay in. As a result, our wage distribution is more equal today than it was in 2019.

So that mitigates some of the strain from the fact that lower-wage workers would have been the ones hurt most by the sizable increase in food prices in the early 2020s.

One other item I want to point out in the State of Working Wisconsin report is that Wisconsin women continued to close the pay gap with men in 2023, with solid pay gains vs inflation in both 2022 and 2023. On the down side, Wisconsin men saw their (higher) real pay slide down some in those 2 years, and still aren't back at the (inflation-adjusted) level they were at before the Reagan era.

Since 1979, all workers have seen their wages increase by 16%. However, these gains have not been consistent across demographic groups. Over this period, women’s wages have increased by 28% while men’s have fallen by 8.1%.

The gains in women’s wages have been driven by white women who have seen an astounding 43% growth, with strong growth for Hispanic and Black women at 38% and 14%, respectively.

The lack of real men's wage growth in Wisconsin is a blemish on an otherwise strong situation for Wisconsinites as last year ended. And the good times seem likely to have continued so far in 2024, as jobs have continued to be added, and unemployment has stayed around or below 3% in the state while the US unemployment rate has risen to 4.3%.

Not a bad place to be on this Labor Day, even if there is still a lot of work to be done in terms of taking back what has been taken from so many over the last few decades.