Class of 2023: Young workers have experienced strong wage growth since 2020

In part one of this blog post series, we found that the Class of 2023 is graduating into an exceptionally strong labor market, with the lowest unemployment rate for young adults in 70 years. In part two, we found that young adults are more likely to have predictable work hours, work full time, and have only one job now than in 2019. In the third and final part of our series, we analyze how young workers’ wages have changed over the pandemic and differ across demographic groups.

We find:

  • Workers of all ages have experienced stronger-than-usual wage growth in the pandemic business cycle (February 2020 to March 2023)—even after accounting for high inflation—but young workers were not left behind like they have been in previous business cycles.
  • Entry-level high school graduates (ages 17–20) saw real wage growth three times as fast as entry-level college graduates (ages 21–24) in the pandemic business cycle.
  • Gender and racial wage gaps already exist among entry-level high school graduates. Women are paid 14% less than men on average, while white workers earn slightly more on average than their Black and Asian American/Pacific Islander (AAPI) counterparts.
  • Among entry-level college graduates, women and Hispanic and Black workers fall even further behind. Women are paid 16% less than men on average, while Hispanic and Black workers are paid 6% and 11% less, respectively, than their white counterparts on average.

As shown in Figure A below, wage growth was strong for workers of all ages in the pandemic recovery, but young workers experienced faster wage growth (5.9%) than workers ages 25 and older (4.7%). Compared with the previous four business cycles, wage growth in this recovery was extraordinarily fast for young workers. Wage growth was not only significantly above zero for the first time in the early stages of a recovery, it was also 7.1 percentage points faster than the recovery following the Great Recession of 2008 and 14.4 percentage points faster than in 1979–1982.

Policy investments at the scale of the problem in the pandemic helped many workers stay afloat while sparking the recovery. After the huge job losses in March and April 2020 (specifically in industries most likely to employ younger workers), policymakers passed large fiscal recovery packages that spurred frantic rehiring efforts, which gave workers leverage to advocate for higher wages and better working conditions. Further, pandemic relief efforts like expanded unemployment insurance coverage and economic impact payments gave these workers a savings buffer that let them be more selective than normal when accepting a job offer. This meant that, unlike in previous business cycles, young workers’ wage growth was powerfully supported by policy.

Young workers experienced stronger-than-usual wage growth in the pandemic business cycle: Real wage changes for young workers and workers ages 25 and older, three years from prior peak, in current and last four business cycles


Young workers, 16-24 Workers 25+
Jan 1980 –
Feb 1983
-8.5% -1.4%
Jul 1990 –  
Aug 1993
-4.4% -0.2%
Mar 2001 –
Apr 2004
0.6% 3.6%
Dec 2007 –
Jan 2011
-1.2% 1.9%
Feb 2020 –
Mar 2023
5.9% 4.7%
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The data below can be saved or copied directly into Excel.