For decades, U.S. workers won higher pay in lockstep with productivity growth — as businesses became more efficient, they rewarded employees with commensurate wage increases.
But in the early-mid 1970s, the lines diverged (chart above) — economic production kept rising, but wages not so much, including long periods of going flat.
Jared Bernstein, a fellow at the Center on Budget and Policy Priorities and former chief economist to Vice President Joe Biden, tells Axios that part of the reason is globalization and the lessening power of labor unions.
- But there also is an unexplained factor — economists don't know why wages are stuck despite an ultra-tight 3.9% jobless rate and the slow but continued rise of productivity.
Go deeper: Bernstein's Aug. 3 blog post on the wages and productivity puzzle