The most disappointing feature of the most recent jobs report is that wages did not grow very much, even though the U.S. economy is at or near full employment. For 2019, wages grew at 2.9% — but, since inflation is about 2%, real wage growth is about 1%. That’s hardly impressive. The last decade was the second-slowest for payroll growth since the 1940s.
If the roots of this slow wage growth were better understood, there might be better ideas about how to boost it. Unfortunately, there are few easy fixes, and at this point there is not much the Fed can do about it.
