Middle-Class Hourly Wages as of October 2023
I've updated this series to include the October release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $49,185, down 8.1% from over 50 years ago. After adjusting for inflation, hourly earnings are below their all-time high from April 2020.
The Bureau of Labor Statistics has been collecting data on this workforce cohort since 1964. The government numbers provide some excellent insights on the income history of what we might think of as the private middle-class wage earner.
The first snapshot shows the growth of average hourly earnings. The nominal data exhibits a relatively smooth upward trend. The COVID pandemic caused a temporary rise in earnings likely due to demand for temporary work. Hourly earnings in October were at $29.19, up from $29.09 in September.
There are, however, two critical pieces of information that dramatically alter the nominal series: the average hours per week and inflation.
The average hours per week has trended in quite a different direction, from around 39 hours per week in the mid-1960s to a low of 33 hours at the end of the great recession (2009). At the beginning of the COVID crisis, weekly hours dropped to as low as 33.4. However, at the start of 2021, weekly hours quickly rose to levels last seen in the mid to late 90s before retreating back to around the 34 hour mark that we currently sit at. More specifically, weekly hours in October were at 33.7 hours, down from September.