--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-41/the-productivity-median-compensation-gap-in-the-united-states-the-contribution-of-increased-wage-inequality-and-the-role-of-policy-choices/" title: "The Productivity-Median Compensation Gap in the United States: The Contribution of Increased Wage Inequality and the Role of Policy Choices" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T08:01:55+00:00" date_modified: "2026-07-13T08:01:55+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2021" ipm_keyword: - "1979-2017" - "collective bargaining" - "Economic Policy Institute" - "globalization" - "inequality" - "labour share" - "median compensation" - "policy" - "productivity" - "United States" - "wages" ipm_research_theme: - "Labour" ipm_country_focus: - "United States" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # The Productivity-Median Compensation Gap in the United States: The Contribution of Increased Wage Inequality and the Role of Policy Choices Canonical URL: https://csls.ca/ipm-archive/ipm-issue-41/the-productivity-median-compensation-gap-in-the-united-states-the-contribution-of-increased-wage-inequality-and-the-role-of-policy-choices/ # The Productivity-Median Compensation Gap in the United States: The Contribution of Increased Wage Inequality and the Role of Policy Choices [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-41-3-Mishel-Bivens.pdf) Cite this article × Cite this article as: Mishel, Lawrence, and Josh Bivens. 2021. “The Productivity-Median Compensation Gap in the United States: The Contribution of Increased Wage Inequality and the Role of Policy Choices.” International Productivity Monitor, No. 41 (Fall 2021): 61–97. https://www.csls.ca/ipm-archive/ipm-issue-41/the-productivity-median-compensation-gap-in-the-united-states-the-contribution-of-increased-wage-inequality-and-the-role-of-policy-choices/ ## Authors: - Lawrence Mishel Economic Policy Institute - Josh Bivens Economic Policy Institute ## IPM Issue 41 Fall 2021 pp. 61–97 ## Related IPM articles [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [Adult Skills and Productivity: New Evidence from PIAAC 2023 Dan Andrews, Balázs Égert, Christine de La Maisonneuve Fall 2025 | IPM Issue 49 | pp. 41–63](https://csls.ca/ipm-archive/ipm-issue-49/adult-skills-and-productivity-new-evidence-from-piaac-2023/) [The Potential Impact of Pro-competitive Regulatory Reforms on Productivity and Growth in Canada Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 3–40](https://csls.ca/ipm-archive/ipm-issue-49/the-potential-impact-of-pro-competitive-regulatory-reforms-on-productivity-and-growth-in-canada/) [De-industrialization and the Great Productivity Slowdown: What Comes Next? 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The Canadian Experience Tim Sargent Fall 2024 | IPM Issue 47 | pp. 39–53](https://csls.ca/ipm-archive/ipm-issue-47/how-does-industrial-policy-impact-output-hours-and-productivity-the-canadian-experience/) [Climate Change and Productivity — An Exploration Dirk Pilat Fall 2024 | IPM Issue 47 | pp. 54–86](https://csls.ca/ipm-archive/ipm-issue-47/climate-change-and-productivity-an-exploration/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn This article offers a narrative and supporting evidence on mechanisms that suppressed wage growth and generated a divergence of 43 percentage points (1.05 points per year) between net productivity and median hourly compensation growth between 1979 and 2017 in the United States. These dynamics reflect the strengthening of employers’ power relative to white-collar and blue-collar workers. We offer empirical assessments of the impact of particular factors on wage growth and wage inequality. The three factors with the largest and best measurement impacts, i.e., excessive unemployment, eroded collective bargaining, and corporate-driven globalization — explain 55 per cent of the divergence. Other factors — a diminished overtime salary threshold, employee misclassification, employer-imposed noncompete agreements, and corporate fissuring-subcontracting and major-buyer dominance — explain another 20 per cent. Together, these policy-related factors can account for threefourths of the 1979-2017 divergence between productivity and median hourly compensation growth. Cet article offre un récit et des données probantes à l’appui sur les mécanismes qui ont freiné la croissance des salaires et généré une divergence de 43 points de pourcentage (1,05 point par année) entre la croissance de la productivité nette et la croissance de la rémunération horaire médiane entre 1979 et 2017 aux États-Unis. Ces dynamiques reflètent le renforcement du pouvoir des employeurs par rapport aux travailleurs cols blancs et cols bleus. Nous proposons des évaluations empiriques de l’impact de facteurs particuliers sur la croissance des salaires et l’inégalité salariale. Les trois facteurs ayant les impacts les plus importants et les mieux mesurés — un chômage excessif, l’érosion de la négociation collective et la mondialisation pilotée par les entreprises — expliquent 55 % de la divergence. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-41-3-Mishel-Bivens.pdf)