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Paychecks at the top, at the bottom, and in the middle

A look at the distribution of wage income


Let’s consider the topic of income disparity by looking at some data from our friends at the Bureau of Labor Statistics—or, as we like to call them, the BLS. (Just to clarify: Top incomes are increasing more than others not so much because of regular labor income, but largely because of capital income, various bonuses, and the like. That said, in this post we’ll stick with the distribution of regular wage income.)

The BLS’s Current Population Survey provides weekly wage income data for the U.S. population that can be split into various segments: These segments are ordered by income, from the very top (100%) to the very bottom (1%). The segments we chose, from top to bottom in the graph, are the 90%, 75%, 25%, and 10% levels. (That is, the ninth decile, the third quartile, the first quartile, and the first decile.) The reported income for each of these segments is divided by the median income to show how each segment compares with the wage earner in the middle of the entire distribution.

So, what do we learn from this graph? For one thing, in 2018, the wage earner at the 90% level got 2.4 times what the median wage earner got. The wage earner at the 10% level got half of what the median wage earner got. It appears that the two bottom segments (25% and 10%) are rather stable compared with the median, except for a surprising improvement recently for the 10% level. The 75% level is almost completely flat. The 90% level is showing a gradual increase, about 10% over the 18 years for which we have data. Although wage income disparity isn’t as spectacular as total income disparity, it is increasing.

How this graph was created: From the release table with the wage quantiles, select the series you want and click “Add to Graph.” If necessary, restrict the sample period to include all series. From the “Edit Graph” panel, add to each line the median statistic (series ID LEU0252887700A), applying formula a/b. From the “Format” tab, move the lines so that the order of the legends matches the order of the lines in the graph. Finally, de-select the “Show: Title” option, as the legends take waaaaaay too much space. (The legends are mostly still visible when you hover over the lines, though.)

Suggested by Christian Zimmermann.

View on FRED, series used in this post: LEU0252887700A, LEU0252916000A, LEU0252916100A, LEU0252916200A, LEU0252916300A


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