It's the great economic conundrum of our day: if the unemployment rate is so low, why aren't wages growing faster? The law of supply and demand tells us that as labor gets scarce, wages should rise. Yet, as we saw in the latest jobs figures on Friday, average U.S. hourly earnings have barely exceeded inflation for three years running.
What's going on? The answer may lie in the Wage Growth Tracker (below), an alternative gauge produced by the Federal Reserve's Atlanta bank. It substantiates what a lot of people have suspected: that older, higher-paid workers are leaving the workforce and being replaced with cheaper, younger workers who hold little bargaining strength when they can be quickly replaced by automation.
Data: Federal Reserve Bank of Atlanta; Chart: Lazaro Gamio / Axios