Real Earnings, Health Insurance and Pension Coverage, and the Distribution of Earnings, 1979-2009

Gerald Mayer
Analyst in Labor Policy

Worker pay and fringe benefits, such as employer contributions for health insurance or to a retirement plan, are indicators of a nation’s economic well-being.

An analysis of real weekly earnings (i.e., actual earnings adjusted for inflation) of all part-time and full-time and part-year and year-round workers shows that, from 1979 to 2009, real earnings increased by 24.4%, to $893 a week. During the same period, the real weekly earnings of workers employed full-time, year-round increased by 16.9%, to $1,098 a week. Although real earnings increased for workers at all earnings levels, the largest increase was for workers at the 95th percentile (i.e., workers with the highest earnings).

From 1979 to 2009, the real weekly earnings of women increased more than the earnings of men. Thus, the earnings gap between men and women narrowed over the period.

The distribution of weekly earnings became more unequal from 1979 to 2009. Inequality increased among both men and women. Most of the increase in inequality occurred during the 1980s. Inequality increased mainly because the share of total earnings received by the top 5% of earners increased, while the share received by workers at the lowest four quintiles declined.

From 1979 to 2009, at the 20th percentile, the real weekly earnings of men employed full-time, year-round fell by 6.4%, while the real earnings of women increased by 16.8%. At the 40th percentile, the real earnings of men were relatively unchanged (up 0.1%), but the real earnings of women increased by 18.6%.

From 1987 to 2009, the percentage of workers employed full-time, year-round who had employment-based health insurance coverage fell by 7.9%. The decline was greater among workers with lower earnings, and greater among men (9.3%) than women (6.3%).

The percentage of full-time, year-round workers who participated in an employer- or unionprovided pension plan fell from 59.0% in 1979 to 51.5% in 2009, a decrease of 7.5%. The decline was greater among men (10.4%) than women (2.9%). Among men, the largest reductions were among middle-wage workers (i.e., men at the second, third, and fourth quintiles).

From 1979 to 2009, at the 20th and 40th percentiles, the real weekly earnings of men employed full-time, year-round either declined or were unchanged. Men at the lowest and second quintiles were more likely than other men to have lost health insurance coverage. At the lowest quintile, although the percentage of men who participated in an employer- or union-provided pension plan fell by 8.6%, the decline in participation was greater for middle-wage men.

Among women employed full-time, year-round, real weekly earnings increased at all earnings levels from 1979 to 2009. The smallest increases were for women at the 20th and 40th percentiles. The decline in health insurance coverage was greatest for women at the lowest and second quintiles. At the lowest quintile, from 1979 to 2009, the percentage of women who participated in an employment-based pension plan fell by 4.4%. At other quintiles, participation either fell or was unchanged.


Date of Report: July 6, 2011
Number of Pages: 55
Order Number: RL33835
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.