Noah Smith, Columnist

The Mystery of Puny Pay Raises

Economists are stumped: When the economy is this good, wages should be rising much more.

June 11, 2018 at 11:00 AM UTC

Noah Smith is a former Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

No nostalgia for those days.
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With the economy strong and unemployment low, why is wage growth so sluggish? Lots of economists and pundits are debating this vexing question. When the labor market gets tight, wages are supposed to rise faster. Instead, median wage growth is slower than it was back in 2016:

The most benign explanation is that there’s no mystery here — total compensation, which includes both wages and benefits, may be accelerating: