Low-Wage Workers Climb the Earnings Ladder

Wall Street Journal (03/06/23) Lahart, Justin

U.S. Department of Labor data documents the outsized wage gains of lower-paid workers compared with those of better paid workers since the pandemic began. A paper by economists at the Massachusetts Institute of Technology and the University of Massachusetts Amherst explores how this came about. Even as the pandemic fades, competition for low-wage workers will be more intense than before the pandemic, according to the researchers.

That could raise labor costs at firms that employ low-wage workers, reshape the U.S. business landscape, and further reduce income inequality. However, low-wage workers are not doing uniformly better. Older, less-educated workers who stayed in the same job through the pandemic have not kept ahead of inflation like those who are younger and pursued new jobs.

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