Black Workers, Young People Received Biggest Pay Hikes Last Quarter
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Here's your Money Briefing for Wednesday, January 25th. I'm J.R. Whelan for The Wall Street Journal. We've talked quite a bit on the show about how the complexion of the labor market has changed coming out of the pandemic. More people uprooting and changing jobs, more people choosing remote work, and workers getting sizable wage gains. But a significant statistic has emerged. The biggest pay raises in the fourth quarter of last year went to Black workers, young people, and low-skilled workers.
And these increases really come as welcome relief, and they're often few and far between, these opportunities to get ahead. So it's really important that we see growth for the most disadvantaged workers when the labor market is tight, because if not now, it might not come another time.
So how likely are these workers and workers across all demographics likely to be able to build upon 2022 salary gains this year? WSJ's Gabe Rubin covers national economics in the labor market, and we'll go through the numbers with him after the break.
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Americans' paychecks got a little fatter in 2022 as businesses dug deeper into the company coffers to dole out raises. And the Labor Department says the biggest raises last quarter went to Black workers, young people, and low-wage earners. So why those groups, and what does the 2023 jobs picture look like for them?
What is the episode about and who is the guest explaining pay trends?
WSJ economics reporter Gabe Rubin has written extensively about the labor market and rising wages, and he joins us now. Hey, Gabe, thank you very much for being with us.
Pleasure to be with you.
So, Gabe, let's just take a step back for a moment. Overall, weekly earnings for workers in the U.S. across all demographics rose 7.4 percent last year. That sounds like a small victory against inflation.
Yeah, but emphasis on small, because with 7.4% average earnings growth and 7.1% consumer inflation, earnings are just barely outpacing prices. And for some workers, they're getting significantly lower raises, and they're really feeling the pinch when it comes to buying things.
All right, so let's dig into the numbers a bit. The biggest raises went to black workers, young people, and low-wage workers. How do the numbers stack up there?
So the median increase in earnings for black Americans who are employed full time was 11.3 percent over the prior year. And that was the fastest rate we saw compared to other demographic groups. And young workers who are between the ages of 16 and 24, their earnings rose more than 10 percent over the prior year. Now, especially for young workers, we have to put that in context because at the beginning of someone's career, they're more likely to get bigger raises because they're starting from a lower base. So if you were getting paid, for instance, $15 and you got a 10% raise, you're now making $16.50 an hour.
Okay, that's a good point. So how do those percentage gains work out in terms of dollars in paychecks?
So the median black workers' weekly pay increased by about $90.
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