Peterson Institute economist gives the OK to discuss higher wages
The Upshot is turning into a pretty good read, and it's icing on the cake that it makes Nate Silver look dispensable:
In Tepid Wage Growth, a Potent Sign of a Still-Fragile Economy
David G. Blanchflower, an economics professor at Dartmouth College, and Adam S. Posen, president of the Peterson Institute for International Economics, argue in a new paper that the slow pace of wage growth is the best indicator of an incomplete economic recovery. Until wages start rising more quickly, the economy remains far from healthy.
The two men also argue that the Federal Reserve should focus on wage growth in calibrating its stimulus campaign because wage growth effectively summarizes other measures like unemployment and participation.
Mr. Blanchflower found affirmation for this theory in Friday’s jobs report. In the traditional view, the decline of the official unemployment rate should have indicated that the labor market was closer to good health, and it should have put upward pressure on wages. But the unemployment rate fell entirely because people stopped looking for work, not because they found jobs. And wages did not rise by even a penny.
“What happened today is entirely consistent with what we said would happen,” Mr. Blanchflower said in an interview by telephone on Friday morning. “Hourly wages were up two pennies last month, and this month they’re flat, and that tells you there’s too much slack in the labor market. And all the other stuff is just noise.”
OK, now wage growth is "on the table." Yay!
Even though real wages have been flat for forty years and we're six year into a depression must of us have yet to recover from.