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Where Is the Juice?

US employment growth continues to churn ahead, last month producing 222,000 jobs, continuing the 81-month stretch of job growth since October 2010.…

By Anthony J. LoPinto | anthonylopinto | Updated on July 11, 2017

Anthony LoPinto

US employment growth continues to churn ahead, last month producing 222,000 jobs, continuing the 81-month stretch of job growth since October 2010. This phenomenal track record has resulted in the unemployment rate touching a 16-year low in May, and job openings hit a record high earlier this year. So with all this exceptionally good news, why aren’t wages keeping pace and rising?

Tepid growth on the wage front is confounding many because income should, in theory, rise faster as employers compete for increasingly scarce talent.  The Wall Street Journal last week noted that a more globalized economy is holding down what workers can earn everywhere, especially in rich countries who are losing manufacturing jobs to lower-wage economies. The other issue is the reduced power of unions that is dampening the bargaining power of workers. On the corporate front, we observe that corporations continue to hold the line on fixed salary growth and are shifting emphasis to higher variable compensation.

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