Wages grew faster in past expansions
The December jobs report, which is released today, shows how many more jobs were added to the economy. Just as important as the number of jobs is how much they’re paying.
Wages are supposed to go up when unemployment is low — and it hasn’t been this low for 50 years. But wages still have room to grow.
Wage gains were stuck around 3% a year in 2019. They rose well-over 4% in the economic booms of the late-90s and mid-2000s.
Berkeley economist Jesse Rothstein said the current job market probably isn’t as tight as 3.5% unemployment suggests.
“There are people who are not actively looking for work but are on the margins and are available to be pulled back in,” Rothstein said. “People who are not in a way fully employed — driving a little bit for Uber on the side. They might still be available to take a real job if one becomes available.”
So employers may not feel much pressure to raise wages to keep the workers they already have — like Idaho grocery clerk Mark Pemble, who said he makes $15 an hour.
“In the last three years, my pay has not gone up at all. You know, honestly, cost of living is not easy to handle,” Pemble said.
A recent survey by Morning Consult finds Americans’ confidence about their personal finances hasn’t improved much in the past year.
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