During the past four years, "average wages have barely budged."
One of the key themes of President Barack Obama’s State of the Union address was income inequality. "Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better," Obama said. "But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by - let alone get ahead. And too many still aren't working at all." Here, we will check Obama’s claim that during the past four years, "average wages have barely budged." At PolitiFact, one of our core principles is "words matter." So in this item, we will look at average wages -- not the median wage, and not the average (or median) family income or household income. We found two federal data sets that look at the average wage. • The Bureau of Labor Statistics’ National Occupational Employment and Wage Estimates These statistics are based on data collected from employers in all industry sectors and in all types of regions nationwide. The most recent year available is 2012. Year Mean annual wage, all occupations Inflation-adjusted mean annual wage in 2012 dollars 2008 $42,270 $45,076 2009 $43,460 $46,510 2010 $44,410 $46,760 2011 $45,230 $46,166 2012 $45,790 $45,790 So according to this data set, the average annual wage increased by 8.3 percent between 2008 and 2012. (We also looked at the changes between 2009 and 2012, since either date range seems a plausible "four-year" period to us, and the numbers were similar..) However, this raw wage data doesn’t take into account inflation -- something economists like to consider when determining whether a wage "barely budged." When you use an inflation calculator, the average wage from 2008 was equivalent to $45,075 in 2012 dollars, meaning that the inflation-adjusted wage rose during that period, but only narrowly -- about 1.6 percent. By this data, Obama is correct. • The Social Security Administration's National Average Wage Index These are the numbers used to calculate Social Security recipients’ benefit levels. Here’s the breakdown: Year National average wage In 2012 dollars 2008 $41,335 $44,079 2009 $40,712 $43,569 2010 $41,674 $43,879 2011 $42,980 $43,869 2012 $44,322 $44,322 According to this data set, the average annual wage increased by 7.2 percent between 2008 and 2012. After you adjust for inflation, the average wage from 2008 was $44,079 in 2012 dollars. So from 2008-12, the inflation-adjusted wage rose by less than 1 percent. Whichever data you use, the increases are pretty modest, particularly given that they were spread out over a four-year period. Our ruling Obama said that during the past four years, "average wages have barely budged." Two federal data sets broadly agree: Over the most recent four-year period, the average wage has risen no more than 1.7 percent above inflation. That’s a rising wage -- but by a small amount, about a half a percentage point above inflation per year. We think that’s a reasonable definition for "barely budged." So we rate Obama’s claim True.
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