I’ve recently embarked on a series of articles discussing American jobs and wages. Today’s topic is, appropriately enough, wage growth.
The American economy is still creating jobs at a good clip, as evidenced by March’s jobs numbers. February’s inferior numbers in this regard were rightly attributed to the government shutdown.
But the question remains: why, in a tight labor market, is America’s wage growth so slow? Workers received only a four cent raise in March, on average.
There are a few reasons for this. For one, baby boomers are retiring in droves. They, being older and more experienced, make more money on average, leading to wage growth declining in their absence.
The economy may be bringing workers previously deemed unemployable into the workforce, a good thing to be sure. Their wages, as one might expect, are likely to be lower, on average. Immigration may also explain some of the seemingly sluggish growth, as many immigrants take lower-skilled jobs or start businesses that take a while to get off the road.
All of that is fine, but there may be a more sinister reason: American workers don’t have the kind of representation at the bargaining table that they once did. Some workers are unionizing and organizing in other ways to reverse this trend, which is to be celebrated.
America’s economy needs more wage growth, and workers need a spot at the bargaining table. Thirty years of “shareholder first” capitalism is quite enough; we need a more humane model.