Median wage falls to lowest level since 1998

By:  David Cay Johnston

Last year the median wage hit its lowest level since 1998, revealing that at least half of American workers are being left behind as the economy slowly recovers from the Great Recession.

But at the top, wages soared — the latest indication in a long-running trend of increasing inequality, with income gains going to top earners while the majority of workers see stagnant or falling wages.

Al Jazeera is the first news organization to report these figures from the Social Security Administration (SSA), which were released late in October.

The median wage — half of workers make more, half less — came to $27,519 last year, virtually unchanged from 2011. Measured in 2012 dollars, the median wage was down $4.

The 2012 median wage was at its lowest level since 1998, when the median stood at $26,984.

From its all-time peak in 2007, the median wage was down $980. That means someone at the midpoint in pay worked 52 weeks last year but earned about the equivalent of working just 50 weeks at 2007 pay levels, the last peak year for the economy.

The average wage, on the other hand, improved last year. It increased to $42,498, up $434, or 1 percent from 2011 after considering inflation. But the average wage remained below its $42,921 peak in 2007, I calculated from the SSA data.

These figures from the SSA cover only cash pay, not fringe benefits such as health insurance and pensions. The figures are reported to the Internal Revenue Service to verify what individuals put on their tax returns.

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