Aug 8, 2018

Productivity is slowly rising, but not wages

Adapted from an Economic Policy Institute analysis of data from the Bureau of Labor Statistics and the Bureau of Economic Analysis. Note: Hourly pay refers to wages and benefits of nonsupervisory, private sector workers. Productivity refers to the output of goods and services, accounting for depreciation per hour worked. Chart: Harry Stevens/Axios

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

Go deeper

Unemployment fell to 50-year low in 2019 but wages stagnated

Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

Friday's jobs report missed expectations, but still delivered solid numbers, showing the U.S. economy added well over 100,000 jobs and the unemployment rate remained near a 50-year low.

The big picture: BLS reported that the number of people who were employed part time but would rather be full-time employees declined by 507,000 over the year.

An unsettling future for millions of American jobs

Illustration: Aïda Amer/Axios

The U.S. economy is besting expectations for job growth, and the unemployment rate is at its lowest in several decades — but the other side of the story is that millions of jobs out there just aren't good enough.

Why it matters: Almost half of all American workers are stuck in low-wage jobs that often don't pay enough to support their lives, lack benefits and sit squarely inside the automation bullseye.

U.S. economy adds 145,000 jobs in final report of 2019

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. economy added 145,000 jobs in December, the government said on Friday, below economists’ expectations of 160,000. The unemployment rate held at 3.5% — a 50-year low — while wages grew 2.9% from a year earlier, the smallest gain since July 2018.

Why it matters: The U.S. job market held up in the final month of 2019, but heads into the election year with a slowing pace of job creation and wage growth.

Go deeperArrowJan 10, 2020