If Economists Were Right, You Would Have a Raise by Now
by Peter GosselinJennifer Oldham
12:01 AM EDT March 16, 2015
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Six years into the U.S. expansion, the link between falling unemployment and rising wages -- once almost as basic to economic theory as supply and demand -- seems to be coming unhinged.
The disconnect is puzzling to people like Colorado Governor John Hickenlooper. With one of the best growth rates among the 50 states, a population that’s younger and better educated than the nation’s and a jobless level that’s fallen further and faster than the national average, Colorado seems to have everything going for it.
Yet the rise in the state’s median wage since the recession ended in mid-2009 has averaged just 1.1 percent a year, based on data from the federal government’s Current Population Survey. That’s no better than the lackluster 1-percent-to-2-percent national pace. What gives?
“The whole notion that wage growth has been lagging job growth -- that’s the crux of the problem here,” Hickenlooper said in an interview. “We’re working very hard to figure out why.”
If the current trend continues, millions of working Americans could wait years to recover economically from the last recession and spend most of their adult lives in an economy in which low unemployment doesn't generate the wage growth needed to lift living standards.
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http://www.bloomberg.com/news/articles/2015-03-16/your-wallet-isn-t-getting-fatter-as-economics-101-comes-unhinged
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