Why wages are stagnant

Fidelity International

Fidelity International

Wages growth in the US has largely stagnated since the recession ended in 2009, even though the US economy has added about 10 million jobs since then and the jobless rate has dropped from a peak of 10% in 2010 to levels regarded as close to full-employment. Annual average hourly earnings growth has only hovered around 2% since 2009, well below the 3% to 4% range that Federal Reserve Chair Janet Yellen has said is typical of recoveries. Government reports show real median weekly earnings have dropped about 3% since 2009... Sluggish growth in wages is a problem throughout the developed world, not just in the US. The International Labour Organisation says that wages growth in developed countries slowed to 0.1% in 2012 and 0.2% in 2013 (the latest results available) – below increases in productivity – and that average real wages in 2013 in countries such as Greece, Ireland, Italy, Japan and Spain were below 2007 levels. The following insight piece from Fidelity looks at some of the causes for wage stagnation: (VIEW LINK)

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Fidelity International
Fidelity International

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