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New Estimates for Wage Rate Inequality Using the Employment Cost Index

The Employment Cost Index measures the change in wage rates for a fixed set of jobs over time. The separate indices for industry and occupation groups grew at varying rates during the 1980s. However, their growth rates have been much more similar since then, which implies that the increase in the wage rates of low-wage workers relative to middle-wage workers during the 1990s was due to changes in the mix of jobs. Had all workers remained in their jobs, the relative wage of low-wage to middle-wage workers would have remained constant.