Below is an abstract of a WorldatWork member-only article at The Journal of Total Rewards. You can learn more about the productivity-pay gap here. 

This paper focuses on the historical divergence between typical workers’ compensation and economy-wide productivity, and the implications of this divergence for workplace inequality. Commonly referred to as the “pay-productivity gap”, we show that while inflation-adjusted pay and productivity grew in lock step from the end of WWII until the 1970s, productivity has outpaced pay since 1979. We use publicly available data sources to document this gap and discuss key methodological considerations.

We argue that the equal growth in pay and productivity before 1979 and the subsequent fracturing were driven near-entirely by intentional policy decisions. Beginning in 1979, the efforts by employers and capital-owners to undercut the bargaining power of typical workers in labor markets through policies such as deregulation, corporate-led globalization, erosion of the minimum wage, deunionization, macroeconomic policies that tolerated excess unemployment, and tax cuts for high earners led to a divergence in pay and productivity that has yet to be remedied. Not only have these intentional policy decisions created a large pay-productivity gap since 1979, but they have also coincided with a productivity slow-down across the total economy during this time period, resulting in growth that was slower and less equal.

Productivity-Pay Gap

Recent advances in generative artificial intelligence (AI) have sparked increased awareness and adoption of AI tools in the workplace. While AI systems and tools have been used in the workplace for decades, this acceleration in capabilities and greater public attention have motivated more concerted and urgent policy efforts, including a focus on protecting and empowering workers. During the Biden-Harris administration, leadership and agencies across the federal government acted to better understand the potential implications of AI for workers and to protect workers from risks to their livelihoods and rights. 

The Database of Biden Administration Actions on AI can serve as a resource for state, local, and federal efforts to tackle these challenges and opportunities.

Biden-Harris administration actions to protect workers and the public

In October 2022, the White House Office of Science and Technology Policy released the Blueprint for an AI Bill of Rights to help guide the design, development, and deployment of AI and other automated systems. This document outlines protections that should be guaranteed and served as a guiding resource by affirming the values that must be front and center when undertaking policymaking on AI. 

A few months later, OpenAI released ChatGPT, which spurred an increased sense of urgency for this work. President Biden’s October 2023 executive order (EO) on “Safe, Secure, and Trustworthy Development and Use of AI” was—at the time—the most significant government action globally on AI safety, security, and trust. The EO highlighted a commitment to supporting U.S. workers and directed a number of related agency actions, including the Department of Labor’s (DOL) principles and best practices for developers and employers, which provide a roadmap for responsible use of AI in the workplace. 

From the start of Biden’s administration, federal agency leaders were clear that existing laws and regulations ensure rights and protections related to AI, and that agencies would play an active role in regulation and enforcement. Agency actions included:

• The Equal Employment Opportunity Commission launched an initiative on AI and algorithmic fairness, and shared tips for workers focused on disability discrimination and the use of software. 
• DOL issued a guide for federal contractors on AI and equal employment opportunity—which included a set of promising practices for employers—and addressed AI in other regulations and guidance, including the Good Jobs Principles; rulemaking on independent contractors; and guidance on the use of AI and automated systems and federal labor standards. 
• The Consumer Financial Protection Bureau released guidance to protect workers from surveillance and decision-making that violates Fair Credit Reporting Act rules. 
• The National Labor Relations Board issued guidance focused on unlawful surveillance which could interfere with employees’ ability to engage in collective bargaining and other protected activities. 
• The Federal Trade Commission addressed harmful commercial surveillance by major companies and brought to light the collection and monetization of personal data and the use of corporate surveillance pricing software. 

Trump administration and a new federal landscape

Immediately upon taking office, the Trump administration rescinded President Biden’s executive order on AI and issued a new executive order requiring an immediate review of all actions taken under the previous administration’s executive order. Relevant documents have already been removed from public websites, and many worker protective actions have already been rolled back, along with ongoing cuts decimating many of these agencies. 

In a speech at the February 2025 Artificial Intelligence Action Summit in Paris, Vice President Vance decried excessive regulation of AI domestically and internationally. He also said the Trump administration would “maintain a pro-worker growth path for AI,” but did not provide any policy specifics. The White House and many in Congress also backed a measure in the Republican budget mega bill that would have imposed a 10-year moratorium on any meaningful regulation of AI at the state and local levels, to supposedly avoid hindering tech innovation. While this measure fortunately failed to pass in the final version of the legislation in July 2025, the enthusiasm for ramming it through is a worrying sign of the administration’s priorities, particularly for worker advocates seeking to make meaningful change at the state and local levels.

In July 2025, the White House released its AI Action Plan, which continues to emphasize stripping protections from the public. While the plan purports to focus on empowering workers, the actions it outlines do not address workplace rights, surveillance and privacy, or algorithmic discrimination. Further, the Action Plan’s focus on the importance of deregulation as a prerequisite for AI advancement suggests that worker protections will be put aside. Instead of putting forth a real vision for worker empowerment, the plan suggests that unfunded actions around the edges can make a meaningful difference in worker opportunities and outcomes. 

Looking forward

In this new landscape, the tech industry has been emboldened and is increasing lobbying at the state level in addition to its efforts at the White House and in Congress to undo and prevent meaningful protections related to AI. The combined power, collaboration, and messaging of labor, civil rights, consumer protection, and community groups will be critical. 

A broad and ambitious vision for responsible AI governance is essential at a time when protections are under attack and AI-related risks are more pressing than ever. The Biden-Harris administration began to tackle many questions about the implications and opportunities for workers of advances in AI and automated systems. But this was just a first step and much of the progress at the federal level is now being undone. The vast resources, guidance documents, and innovative enforcement actions can and should be a model to augment existing state, local, and federal efforts to protect and empower workers in an age of rapid AI development and adoption. 

U.S. Census data released this week showed that national median household income held strong in 2024. However, income growth was uneven and regional poverty disparities persisted.

Today, the Census Bureau released 2024 state-level income and poverty data from the American Community Survey (ACS). Although these data come from a different survey than the national income and poverty data, the overall trends are similar, with a range of outcomes across states.

Importantly, these data describe trends for 2024 and tell us nothing about economic conditions this year, in which Trump administration actions—chaotic tariffs, mass deportations, attacks on federal employees—have weakened the labor market, put upward pressure on prices, and threatened to undo recent progress of historically high wage growth and declining inequality.

State-level changes in household income

Between 2023 and 2024, U.S. median household income rose 2.0% to $81,604.1 Median household income varied significantly by state, from a low of $59,127 in Mississippi to $109,707 in the District of Columbia in 2024. Compared with 2023, median household incomes saw the largest decline in Rhode Island (–4.5%) and the largest increase in Alaska (7.3%). Twenty-nine states had a statistically significant increase in median income while the remaining 21 states and D.C. had no measurable year-over-year change in household income, positive or negative.

Because single-year changes can be volatile, it’s useful to look over a longer timeframe to identify trends. Specifically, we compare 2024 data with 2019—the year before the COVID-19 pandemic began—to understand the change in median household income between two recent years in which the economy was relatively strong. Between 2019 and 2024, ACS-measured median household income nationally increased only 1.1% after adjusting for inflation. Idaho (8.3%) and Montana (7.3%) experienced the largest increases in median household income since 2019, while Wyoming (–5.4%) and Minnesota (–4.9%) saw the largest declines. Overall, 30 states experienced an increase in median incomes from 2019 to 2024 and 20 states plus D.C. experienced a decline (see Figure A).

Figure A State-level changes in poverty

The Census reported that poverty rates measurably fell in 13 states from 2023 to 2024. The share of people with incomes below the poverty line ranged from a low of 7.2% in New Hampshire to a high of 18.7% in Louisiana in 2024, compared with the U.S. average of 12.1% as measured by the ACS. Regionally, poverty rates were higher in the South and lower in the Northeast and West. Since 2023, poverty declined nationwide by 0.4% but declined much faster in Montana (–1.5%), New Mexico (–1.4%), and South Dakota (–1.4%). Poverty increased by more than one percentage point in DC (3.3%) and North Dakota (1.3%).

Poverty rates declined slightly less over the past year compared with 2019, but most states made progress nonetheless. Twenty-nine states had lower poverty rates in 2024 than in 2019, while 18 states and D.C. had poverty rates above their 2019 rates, and there was no change in California, New Jersey, and Wyoming (see Figure A). Since 2019, the poverty rate increased the most in D.C. (3.8%)—from 13.5% to 17.3%.

Trump administration actions will harm working families and deepen inequality

The Biden administration’s fiscal response to the COVID-19 pandemic prevented prolonged economic pain, particularly in comparison to the Great Recession. Though inflation was pronounced in 2022, inflationary pressures declined in 2023 and 2024 while wages continued to rise, outpacing inflation and bolstering household income.

Unfortunately, Trump administration policies will undermine recent progress and exacerbate economic precarity for low-income households. In the years ahead, the Republican “One Big Beautiful Bill Act” will decimate access to health care and nutrition assistance for the poorest households while providing a massive tax cut for the wealthy—a giveaway that will cause pain for millions of U.S. households. And Trump’s chaotic trade policies and mass deportation agenda will harm U.S.-born and immigrant workers alike. In fact, some of these harms are already being felt. This month’s jobs report showed slowed growth and rising unemployment.

The Trump administration has also taken actions to undermine the work of civil servants who collect and analyze the data summarized here. The Bureau of Labor Statistic and U.S. Census Bureau provide high-quality, nonpartisan economic data that allow policymakers at all levels of government—as well as business leaders—to plan and make decisions that keep our economy functioning. But the Trump administration has implemented deep staffing cuts at federal agencies and politicized the work of economists and statisticians, eroding trust in government and threatening the credibility of future data collection and analysis efforts.

Amid federal attacks on working families, state lawmakers can advance economic justice

While recently released household income and poverty data showed some improvement in 2024, much more progress is needed to address income inequality and disparities by race and gender in every state. For example, policymakers need to raise the minimum wage, increase workers’ access to a union, implement pro-family policies like affordable child care and paid leave, and make our tax system fairer. In the face of anti-worker policies at the federal level, state lawmakers have an opportunity and responsibility to champion policies that enable workers and families to thrive.

Note

1. According to the data released on Tuesday from the Current Population Survey (CPS), U.S. median household income in 2024 was $83,730—a small (1.3%) but not statistically significant change from 2023. The 2024 value was also essentially the same as that from 2019 ($83,260). The ACS data released Thursday show that median household income rose 2.0% nationally from 2023 to 2024. The differences between these values reflect differences in the methodologies of the two surveys that make them not directly comparable; however, the fact that the ACS change was a statistically measurable increase validates the direction of the change reported by the CPS.