Yahoo Finance’s Alexis Christoforous and Sibille Marcellus discuss why some Americans’ paychecks didn’t budge despite wage growth.

Video Transcript

ALEXIS CHRISTOFOROUS: For all the talk about historic wage growth in the last year or so, most workers barely saw their paychecks budge. Yahoo Finance's Sibile Marcellus joins us now to tell us why. What gives, Sibile?

SIBILE MARCELLUS: That's right, Alexis. So we saw historic wage growth in 2020 amid the pandemic. That's supposed to be good news. Well, it's actually an indicator of more income inequality in America. Now here's what happened. The highest earners did so well during the pandemic last year that they were able to gain an additional close to a million jobs.

But when it comes to those who are the lowest earners, they were the ones who felt the brunt of the coronavirus pandemic and faced those brutal layoffs and those job cuts. And what we're seeing is that the averages when it comes to wages is being pulled up by those highest earners, but it's not reflecting the devastation the pandemic has created on those who are making the least amount of money in our system.

Now if you look at the numbers, the median hourly wages grew an eye-popping 6.9% between 2019 and 2020. For comparison, it only grew 1% between 2018 and 2019. That was amid low unemployment and a tight labor market.

But despite we're seeing that biggest single-year wage growth in 45 years in 2020, it is unfortunately an indication that a lot of low-wage earners in our system have been struggling over the past year and continue to struggle.

ALEXIS CHRISTOFOROUS: All right. Sibile Marcellus, thanks so much.