The dominant narrative in Washington, particularly on the Left, is that income inequality is growing and that average workers no longer benefit from growth. Recent data from the Bureau of Labor Statistics tells a different story: Wage inequality has in fact been declining.
As figure 1 shows, nominal wage growth for working-class Americans has been stronger than for the rest of the population. From 2014 to 2024, wages for the bottom fifth percentile of earners grew by 49 percent, compared to 31 percent for the top fifth.
Figure 1: Wage growth from 2014 to 2024, by 2024 income percentile
John Meynard Keynes famously said, “When the facts change, I change my mind. What do you do, sir?”
Well, others should change their minds, too. This data is very positive. It could be even more positive if the growth rates for each quintile were to double over the next decade.
That should be policymakers’ goal—to raise incomes across all socioeconomic levels, not just to redistribute wealth—and the key to doing this is increasing productivity. A national strategy built around productivity-focused policies would fuel innovation, drive growth, and generate greater wealth for Americans.
