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Oh, this is why wage growth is slow
Author Eugene Coyle
Date 15/01/07/15:59
Hit Count 189

On Mon, Jan 5 Eugene Coyle wrote to PEN-L:

The Federal Reserve in San Francisco has looked into the question of why wage growth is so slow.

I have not read the full letter but I think sharing the beginning with you is very important.

here it is:

FRBSF Economic Letter

2015-01 January 5, 2015
Why Is Wage Growth So Slow?
Mary C. Daly and Bart Hobijn

Despite considerable improvement in the labor market, growth in wages continues to be disappointing. One reason is that many firms were unable to reduce wages during the recession, and they must now work off a stockpile of pent-up wage cuts. This pattern is evident nationwide and explains the variation in wage growth across industries. Industries that were least able to cut wages during the downturn and therefore accrued the most pent-up cuts have experienced relatively slower wage growth during the recovery.


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