Over at the Washington Post, Heather Long is scratching her head:
By just about any metric this is the best job market since the late 1990s. The economy has been adding jobs for 110 straight months — a record streak. Jobs are plentiful. Unemployment is at a half-century low. And the unemployment rates for African Americans, Hispanics, Asians and Americans with less than a high school education are all at the lowest levels since the Labor Department began keeping track. There’s a lot to cheer.
But one of the few head scratchers in this strong jobs picture is why wages aren’t growing as fast as they did in the late 1990s, when yearly wage growth routinely topped 4 percent.
Many hoped this would be the year wages really accelerated. After all, business leaders have been complaining for months they can’t find enough workers — both highly skilled and not — and the natural response to that is usually to bump up pay. But wage growth peaked in February at 3.4 percent and has pulled back since then, puzzling economists. “From late 2017 through late 2018, it looked like wage growth was picking up. That ended. Wage growth has been backsliding this year,” tweeted economist Heidi Shierholz, senior economist at the left-leaning Economic Policy Institute.
Do I even need to write the rest of this post? Long presents a couple of charts that show nominal wage growth even though inflation was a point or two higher during the late 90s than it is now. Accounting for inflation, here is wage growth for blue-collar workers:
The six-year stretch from 1994-2000 showed wage growth almost identical to the six year stretch from 2014-2019. Wages today are continuing to grow at about the same rate that they’ve been growing during the entire period since 2014.
What makes this especially bizarre is that Long suggests a few reasons for the wage “slowdown,” and one of them is inflation! But then she sort of poo-poos the whole idea, acknowledging only that “Some say wages do not need to rise as much if inflation remains low.” Some? How about every single person in the world who understands what inflation is?
It’s at times like this that I wish I were a drinker, because I could use a stiff belt right now. How does this stuff keep happening?