The Washington Post published a piece contrasting stagnant wages against rising inflation and America’s current bout of economic growth. My favorite takeaway is here:
The lack of wage growth has befuddled economists and policymakers, who hoped that after job openings hit record highs and the unemployment rate dipped to the lowest level in decades, employers would give beefy raises to attract and retain workers. But so far, gains have been slight, and small recent increases are being eclipsed by rising prices.
I’m not sure why economists are confused by this, really.
The recession taught businesses that they didn’t need to have a full staff to run a business. People would still use the business because they had little or no alternative. (IE, why Walmart and Target have no cash registers open whenever you go there.)
It also taught businesses that raising wages is counterproductive because they can get by with fewer people in the first place. Businesses aren’t going to raise wages when all wages are low because what are workers going to to, suddenly become skilled? No, they’re going to take the jobs offered them.
This is common sense.
America’s service economy is going to mostly be made up of jobs that anyone can do. And, when anyone can do them, there’s no reason to try to attract workers. There’s no where else for them to go.
