We’ve heard it countless times in recent media accounts: The economy is at “full employment.” The most recent jobs numbers, out the first week in May, show the official unemployment rate and applications for unemployment benefits are at a 50-year low. The last time a recovery was able to push the unemployment rate to these levels was in 1969, when my mom was just entering elementary school and the United States was in the heyday of the “Golden Age” of capitalism.
But economists are puzzled. Despite low unemployment (the current rate is just 3.6%), significant wage increases remain elusive. In other words, workers aren’t benefiting much. This is deeply troubling in an era of unprecedented inequality, driven in large part by decades of a falling wage share. In other words, the size of our economic pie may be getting bigger, but the wage share, or the share of the economic pie going to workers, has been contracting. Further, a lack of wage growth isn’t allowing for the true recovery that main street so desperately needs.
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