Wages are stuck, and barely rose at all in 2013. They were up 1.9 percent last year, or a mere 0.4 percent after accounting for inflation. Not only was that increase even smaller than the one recorded in 2012, it was half the normal rate of wage gains in the two decades before the last recession.
The stagnation helps explain why many people feel apprehensive even though the economy grew at a robust pace in the second half of 2013, corporate profits rose, the stock market boomed and the housing market continued to gain ground. The issue cuts across the American work force. In fact, white-collar workers did a bit worse than blue-collar workers last year in terms of wage growth.
“People are running in place in terms of their living standards,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “There’s almost no growth in spending power.” As recently as 2008, when the economy sank deeper into recession and Lehman Brothers collapsed, wages still managed to rise by 3.5 percent, before inflation. But the combination of a backlog of workers left behind in the recession’s wake, as well as productivity gains resulting from new technologies, means salaries may not rebound anytime soon.
http://www.nytimes.com/2014/02/08/business/us-economy-adds-113000-jobs-unemployment-rate-at-6-6.html?hp
| 