Journal Article

Why Is Wage Growth So Low?

Abstract: Real wage growth has been low in recent years despite continued improvement in the labor market. I examine the interaction between productivity growth and unemployment and show that low productivity growth largely accounts for the current low wage growth. If productivity growth were to pick up, the current low unemployment rate would likely strengthen the positive relationship between productivity growth and wage growth.

Keywords: Unemployment; Productivity growth;

JEL Classification: J30; J60;

Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Macro Bulletin

Publication Date: 2018-12-21

Issue: December 21, 2018

Pages: 1-4