11 July 2013

With Recoveries Like This, Who Needs Recessions?

Microeconomics 101 assumes that productivity and working pay will naturally move in lockstep.  The reality is not so wonderful:
Averaged across all occupations, we estimate that real median wages declined by 2.8 percent from 2009 to 2012. This is a striking decline, given that productivity increased by 4.5 percent over this same time period….lower-wage and mid-wage occupations saw significantly bigger declines in their real wages than did higher-wage occupations. Occupations in the top two quintiles saw their median wages decline by less than 2 percent on average (and nearly a third of those occupations actually saw real wage growth). By contrast, occupations in the bottom three quintiles saw their median wages decline by 3 percent or more.
That is from a recent National Employment Law Project study, discussed by Kevin Drum here.
From here.

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