Making Capitalism Work Better for Workers

For years, economists have puzzled over a question crucial to the well-being of American workers: Why does the law of supply and demand no longer apply to the U.S. labor market? Employers keep hiring, pushing the unemployment rate to record lows. Yet wages have refused to rise as quickly as they have in the past.

Increasingly, researchers are converging on an answer: The labor market isn’t free. If they’re right, it’s a problem that needs to be addressed, or else millions of Americans will fail to reap the full benefits of economic growth.