How Much Are Workers Getting Paid? A Primer on Wage Measurement

Excerpt:  “The American economy is growing again, but many in the media, policy circles, and academia have been puzzled by what appear to be stagnating real wages. The hourly amount that workers are paid can be an important indicator of economic performance and economic policies. It can measure the value of work to an individual and his or her family in terms of what work adds to the family’s purchasing power, at the same time that it indicates the pecuniary incentive to work. Changes in real wages also reflect labor productivity changes, due to technological change, capital deepening, deregulation, or other factors that increase the value of work to employers. But how wages are measured turns out to greatly affect estimates of their level and trend over time.”