It's a mystery. The U.S. economy seems strong. Since the nadir of the Great Recession, employers have added about 19 million workers. The unemployment rate is 4 percent, near the lowest level since 2000. By standard economic theory, the strong demand for labor should be pushing up wages. But that isn't happening. Wage gains of 2.7 percent roughly match inflation.
And no one really knows why.
The puzzle is not just American. It also applies to much of Europe and Japan. "Wage growth is still missing in action," declares a new report from the OECD. Worse, the "unprecedented wage stagnation is not evenly distributed across workers." While wages of the top 1 percent are growing, they're stagnating for most others. Inequality and resentment worsen.
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