What has been the average annual percentage salary increase in the USA in the last decades?

I can’t say what the actual percentage was but it was not enough to keep up with inflation. Executive salaries, however grew by many hundreds of a percent. The difference between company executive salaries and the average worker is comparable to what it was in Dickens’s time. The rich are very very rich and the poor are poorer and still dropping. The middle class is shrinking and if the trend continues, our children and grandchildren will be facing conditions comparable to the characters in Charles Dickens’s Scrooge.

Welcome to Fluther.

Any response that you get on this question in terms of “a number” representing “the answer to your question” should be taken with a grain of salt. Maybe an entire block of salt.

“Percentage increase in salary” is going to cover a lot of ground. It’s a curve with a strong constraint on the left side (but not an absolute bound at “0%”, because some salaries are undoubtedly dropping. Not many, we can presume.) So it’s a curve that more or less starts at 0% and who knows where it ends on the right? 1000%? 10,000%? I don’t know. If an all-star ballplayer gets a new contract raising him from $5 million per year to $6 million per year, then that’s “only” a 20% raise. But a younger ballplayer might get a raise from $1 million to $5 million: a 400% raise.

Even with the information about some “company executive salaries” above, that’s by no means universal. Since most businesses in this country are “small business” and there are relatively few people earning executive salaries on par with some professional athletes. So most “company executives” are probably struggling somewhat, themselves. Okay, so maybe they don’t have to worry about bus fare every day, but still, everyone struggles in his or her own way. And if they can’t afford to send both boys to Philips Exeter or Choate this year, then that might represent their own struggle.

To get a better picture of this one measure of central tendency, average (mean) percentage change in salary is only one value to look at. You might also want to compare that to the median salary change and the entire range of salary changes.

Of course, it would be worthwhile to plot these values against the year-over-year change in inflation, which will better represent the actual “world purchasing power” of the US dollars.

Personally, I don’t think Dickens is going to make a comeback in this country for another few generations.

It depends on the income bracket, the definition of “worker”, whether you adjust for inflation or not, and quite a few other things.

For the average worker, there has been a relatively negligible increase (or even a drop) in real income whereas the top tiers have averaged nearly 400% increase (even more if you go solely by dollar amounts without adjusting for inflation).

So you need to be more specific.

@gery: The general understanding is that when information is omitted, it is intentionally done so. I didn’t ask for inflation adjusted/real measures. I didn’t specify an income bracket because I wanted to have them all included, ceteris paribus etc. . If everyone had to follow your specificity guidelines, normal life would not be possible.

Regardless, I found my answer: http://www.ssa.gov/oact/cola/AWI.html

@jutzfliege Welcome to Fluther. I am glad you found what you were looking for, but your question sent me searching, and I can’t resist posting what I found before you added your link above.

The interesting numbers are when you split out hourly workers versus CEOs. That is where the rapidly widening wealth divide appears, and that divide is what’s driving all the partisan divisiveness in the USA. It is true that class warfare is underway. It is a Big Lie that the lower classes started it or are profiting from it.

When figured in constant dollars, the bottom 10% have seen their wages stay flat from 1979 70 2009. The 50th percentile have gone from just inder $15 an hour in 1979 to around $16 per hour in 2009. The 90th percentile has done reasonably well. They went from about $27 per hour in 1979 to about $38 today. Here’s the data source

But the real winners have been the CEOs, reflecting the current prosperity of the top 1%. Their In 1979, they were making 35 times as much as the average worker. Today, they make 300 times what the average worker makes Source

This means that whereas CEOs used to have very comfortable lifestyles and provide well for their family, they remained ordinary people. No more. They now accumulate so vast an amount of wealth in a career that they launch a dynasty. Their children are able to attend the best prep schools while public education slowly sinks to a level that laeves many unable to do anything more than menial work after graduating from it.

@ETpro And that is why averages don’t mean anything. If you take one person with a million dollars and nine people who don’t have a penny, their average wealth is $100,000 even though 90% of them can’t afford a crust of bread while the 10th person just bought a new Maserati.

@jutzfliege That is why I was/am so picky. I wanted to give you a number that actually had some meaning to it. Without a strong working knowledge of how statistics works, discussing finances is impossible.

BTW, welcome to Fluther, and don’t let me scare you off :D
And in case you haven’t noticed, some of us here like to answer a question completely.

@jerv You read me as a statistically inept individual? I am a PhD student at the best school for statistics in the US. I don’t mention that to brag; I just found it amusing.

I know that there is a heavy correlation between socioeconomic status and relative growth rates of wages. I also know that both will follow very skewed exponential patterns.However, I was just interested in mean behavior.

At my company, annual increases top out at 4%, with most people receiving 1–2%. There are no cost of living increases, and no bonuses.

@jutzfliege since you want a mean statistic, I can give it to you as a member that sits just slightly above the mean.

On average, my company gives pay raises at or slightly below the inflation rate. Since I have an extraordinarily responsible job, I got slightly more in bonus money which raised me about a percent above inflation. However, the last three years have been flat, therefore my bonus almost kept pace with inflation.

What this all means is that, in buying power, I make slightly less than when I started at this company about 15 years ago. Prior to Reagan (in prior jobs) my salary raised about 50% a year, things got consistently worse since Reagen. I am pretty sure that applies to all middle class and below jobs.

I believe the overall mean is around 2.8% I’ve seen a few estimates in that neighborhood but the distribution is heavily skewed since many people have slid down while a few saw their income skyrocket.