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I didn't understand it even on the third read. What are they measuring? An individuals wage growth through their career, or the growth of the US mean or median
by deogeo 8y ago
I didn't understand it even on the third read. What are they measuring? An individuals wage growth through their career, or the growth of the US mean or median wage over time? And what of the mentioned weighting - other than that it's 'different' between the two methods, I'm utterly confused as to what it actually is, or why there is weighting at all.
- JMTQp8lwXL 8y agoHow I understood it: the measure everyone thinks is wage growth (when we look at published economic data), is assumed to weight all workers equally: making it an unweighted average. What people are actually citing is a metric that gives greater weight to higher earners than lower earners-- that metric is called Average Hourly Earnings (AHE). The name is confusing: it implies an unweighted average (because the word 'average' alone implies adding up all data points, then dividing by the number of points), but in actuality it's weighted. If you calculate wage growth the way people assume it to be (an unweighted average), that growth number is greater.