NC State Ag Economist Dr. Mike Walden – “Has Wage Growth Been Better than It Seemed?”


Mary:  I’m Mary Walden, with economist MW, welcoming you to the economic perspective.  Today’s program asks if wage growth has been better than it seemed.  Mike, one of the criticisms of the job market’s recovery since the end of the Great Recession has been the lack of gains in worker pay.  Until recently, worker pay has barely kept up with inflation.   But now I understand some new research suggests worker pay gains have not been as bad as initially thought.  What changed?

Mike: Summary Answer

  1. The research was recently released by the Federal Reserve
  2. The Fed separated workers into two groups – those who kept full time jobs during and after the recession, and those who lost jobs and then came back into full time work
  3. For those keeping their jobs, pay growth has been much more robust and has kept ahead of inflation during the economic recovery
  4. But for those who left and then are returning to full time work, pay growth has actually been negative
  5. For the second group, makes sense that their pay gains have been slower since many probably had to take different jobs than they had
  6. So this research doesn’t suggest there hasn’t been a pay problem, but it pinpoints exactly where the problem has been
  7. I’m MW

Mary:  And I’m Mary Walden for N C State Extension