Connecting the Dots Between Unemployment and Wage Growth

Colin Gordon of the Iowa Policy Project (and the Tell Tale Chart) has a new graphic illustrating the connection between unemployment and wage growth across the states (see Colin's summary of the data here).

The figure below plots the change in real wages for two seven-year periods, from 1996-2002 and from 2006-2012, against each state's unemployment rate at the midpoint of the period (1999 and 2009, respectively). The red dot is the national average and the orange dot is the Pennsylvania average.

What you see is that on average the lower unemployment (the closer to the origin of the x-axis) the more wage growth there was in a state (the farther away from the origin of the y-axis).

You can see that relationship most clearly if you examine wages at the 10th percentile.

This graphic is a great reminder that it's not just the unemployed who are hurt by high unemployment; even people with jobs get hurt because their wages grow more slowly as a result of high unemployment.

Comments

0 comments posted

Post new comment

Comment Policy:

Thank you for joining the conversation. Comments are limited to 1,500 characters and are subject to approval and moderation. We reserve the right to remove comments that:

  • are injurious, defamatory, profane, off-topic or inappropriate;
  • contain personal attacks or racist, sexist, homophobic, or other slurs;
  • solicit and/or advertise for personal blogs and websites or to sell products or services;
  • may infringe the copyright or intellectual property rights of others or other applicable laws or regulations; or
  • are otherwise inconsistent with the goals of this blog.

Posted comments do not necessarily represent the views of the Keystone Research Center or Pennsylvania Budget and Policy Center and do not constitute official endorsement by either organization. Please note that comments will be approved during the Keystone Research Center's business hours.

If you have questions, please contact [email protected]

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <p> <img>
  • Lines and paragraphs break automatically.