Benchmark
Why Dismal Pay Growth May Be Here to Stay
A slump in productivity is bad news for workers' paychecks
A construction worker in Streator, Illinois.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
It's been a depressing recovery and expansion for Americans waiting for a meaningful pay raise. It may be time for U.S. workers to lower their expectations for good, if a chorus of economists including Stephen Stanley at Amherst Pierpont Securities and Ted Wieseman at Morgan Stanley are right.
Wages have been climbing at a historically weak 2 percent pace since the end of the 2007-2009 recession, and that may be as fast as they will grow, Stanley and Wieseman suggest. Their reasoning is that the two main ingredients for long-run pay gains — productivity and inflation — haven't been increasing as quickly as they had in the past.