So unemployment is down to 5.5%, the rate that signals rising economic health; however, wages have not gone up. WTF?
Neil Irwin explains this puzzle in his Upshot article, “Job Growth was Fantastic Last Month. So Why Aren’t Wages Rising More?” Here’s Irwin’s observation:
“The absence of meaningful gains in American workers’ pay has been one of the lingering problems in the economy. With high rates of job growth and an unemployment rate that is down near normal, healthy levels, you would expect workers to have more leverage to demand raises. We’ve seen anecdotal evidence that is happening, including the major employers Walmart and Aetna voluntarily increasing their wages for lower-level workers.
But the latest jobs numbers offer no real evidence this is an economywide trend. Average hourly earnings rose only 0.1 percent in the month, below forecasts. Over the last year, that number has risen only 1.98 percent, actually down a bit from a few months ago. If there is good news, it is that the sharp 0.5 percent gain reported in January was not revised downward, but it’s not a great solace.”
Check out the graphs and charts in this article.