The Six Year Pay Cut

It took six years for wages to recover from the recession in the 2000/2001 time frame as reported by analysis of the IRS reports. Obviously wage growth outpaced productivity returns during the late ’90s so a natural contraction was needed to clear out the waste. But six years is still a lot of time to just get back, especially when you consider the productivity gains made during the last 5 years. Here are some of the stats:

Adjusted Tax Returns:

2000 – $57,289
2001 – $51,870
2006 – $58,029
Percent increase from 2000 to 2006 – 1.2%

Total income increase by $619.2 Billion, an 8.3% increase

All of it went to people earning more than $75,000
$260 Billion of that total went to those making over $1 million

Average Wage:

2000 – $47,097
2003 – $45,956
2006 – $46,996

More information on the subject can be found at this David Cay Johnston article called Average U.S. Income Rose in 2006 in the NY Times


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