Low Income Workers Are Finally Making Progress In The U.S.

This is the most promising economic news I've seen in a long time, although the causes that are driving it are unclear. It potentially also has broad political implications, potentially undermining the economic malaise among low income workers that has driven far-right tendencies in U.S. politics.

US earnings inequality has not increased in the last decade. This marks the first sustained reversal of rising earnings inequality since 1980. We document this shift across eight data sources using worker surveys, employer-reported data, and administrative data. The reversal is due to a shrinking gap between low-wage and median-wage workers. In contrast, the gap between top and median workers has persisted. 

Rising pay for low-wage workers is not mainly due to the changing composition of workers or jobs, minimum wage increases, or workplace-specific sources of inequality. Instead, it is due to broadly rising pay in low-wage occupations, which has particularly benefited workers in tightening labor markets. Rebounding post–Great Recession labor demand at the bottom offset enduring drivers of inequality.

From PNAS.