Sluggish Wage and Productivity Growth

Structural changes are to blame

NATALIE DENBY AND BLU PUTNAM, INTELLIGENCE & ANALYTICS, CME GROUP
6

Despite a tight labor market, wage and productivity growth remain low in the US. Wage growth stood at just 2.5% in July 2017, on par with post-Recession performance. Labor productivity growth averaged only 1.1% between 2007 and 2016. Between 1995 and 2007, by contrast, the average growth rate was 2.5%. Although cyclical factors may be partially to blame, there are several key structural features of the US economy contributing to diminished growth. Wage and productivity growth are being held back...

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