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Which wages are really increasing? The evolution of wages by sector


Wages are in the news, so we take the opportunity to see how they’ve evolved recently. In the graph above, wages are separated into three large categories: the goods-producing sector, the service-providing sector, and government. Two notions are clear: Wages are generally trending upward, which should come as no surprise because they haven’t been adjusted for inflation. And the most growth is in the service sector and the least is in government.

The graph below adjusts for inflation using the consumer price index (CPI) and looks at the year-to-year change for all three series. This inflation adjustment makes it clear that wages are not always increasing in real terms. In fact, service sector real wages increase more frequently than government real wages, which is how the gap in the first graph can be explained. Of course, this analysis is at a very high level; our Employment Cost Index release tables offer much more detail.

How these graphs were created: From the Employment Cost Index release tables, select Table 2, then check the series you want, and click “Add to Graph.” For the second graph, click on “Edit Graph” and do the following for each line: add series “CPI,” apply formula a/b, and select units “Percent change from year ago.”

Suggested by Christian Zimmermann.

View on FRED, series used in this post: CIS202G000000000I, CIS202S000000000I, CPIAUCSL, ECIGVTWAG


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