Why Hasn't Record Low Unemployment Led to Higher Wages?
When it comes to the U.S. workforce, the "law" of supply and demand just isn't getting the job done. One might expect that with unemployment at a 50-year low, companies would be paying more to secure the workers they need to fill open positions, and to hold onto the people they have. Low worker supply plus relatively strong demand for employees should equal higher wages.
In most industries, that simply has not happened. Overall in the third quarter, average wages only increased by 0.5% from the second quarter, and 2.6% year over year, according to The PayScale Index. That anemic growth barely kept up with inflation, meaning in real terms, despite conditions that appear to be the most favorable for U.S. workers in decades, most of them are essentially treading water right now.
"Unemployment numbers hit a record low of 3.5 percent in September which was not surprising with job growth averaging 161,000 new jobs per month for the first nine months of the year," said Sudarshan Sampath, research director at the compensation software company PayScale, in a press release. "However, we are seeing this remarkable job growth now beginning to slow, as the economy loses some of its spark. We expect wage growth to remain at its steady rate in the coming months as a result."
Source Fool.com
