Why Low Unemployment Rate in the United states Has not Delivered Meaningful Wage Growth

Xilei Lu; Xiyuan Wu; Ruixi Xu

doi:10.54097/hbem.v2i.2386

Authors

Xilei Lu
Xiyuan Wu
Ruixi Xu

DOI:

https://doi.org/10.54097/hbem.v2i.2386

Keywords:

Unemployment rate, wage growth, inflation, globalization.

Abstract

Wages have always been one of the most important concerns for employees and unemployment is one of the most important statistics for society. After studying the unemployment rate and wage growth data in the United States in recent years, it is evident that a low unemployment rate does not lead to meaningful wage growth. This paper explains that the main causes of this are domestic and foreign factors in the United States. This paper divides the influencing factors into two broad categories (domestic factors and foreign factors) and summarizes the foreign factors into the composition of employment, the productivity of labor and companies, inflation and labor unions, and the foreign factors are attributed to the effects brought about by globalization.

Downloads

Download data is not yet available.

References

Phillips A W. The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1861-1957[J]. economica, 1958, 25(100): 283-299.

Donayre L, Panovska I. US wage growth and nonlinearities: The roles of inflation and unemployment[J]. Economic Modelling, 2018, 68: 273-292.

Stiglitz J E. America’s Great Malaise and what to do about it[J]. 2016.

Shimer R. Why is the US unemployment rate so much lower? [J]. NBER macroeconomics annual, 1998, 13: 11-61.

Blanchflower D G, Levin A T. Labor market slack and monetary policy[R]. National Bureau of Economic Research, 2015.

US Bureau of Labor Statistics (2020). US unemployment sees surprise improvement in May https://www.bbc.com/news/business-52938993

Labor department |WSJ.com (2015). Did Wages Peak in 1972?

http://wonkwire.com/2015/04/20/38910/

David H, Dorn D. The growth of low-skill service jobs and the polarization of the US labor market[J]. American economic review, 2013, 103(5): 1553-97.

Kouvavas O, Kuik F, Koester G, et al. The effects of changes in the composition of employment on euro area wage growth[J]. Economic Bulletin Articles, 2019, 8.

Daly M C, Hobijn B. Why is wage growth so slow?[J]. FRBSF Economic Letter, 2015, 1(05).

Karanassou M, Sala H. Productivity growth and the Phillips curve: a reassessment of the US experience[J]. Bulletin of Economic Research, 2012, 64(3): 344-366.

Abaidoo R. Corporate profit growth and variability in US unemployment rate[J]. International Journal of Economics and Finance, 2012, 4(7): 3-14.

Brouillette D, Ketcheson J, Kostyshyna O, et al. Wage growth in Canada and the United States: Factors behind recent weakness[R]. Bank of Canada, 2017.

Knotek II E S, Zaman S. On the relationships between wages, prices, and economic activity[J]. Economic Commentary, 2014 (2014-14).

Karanassou M, Sala H. The US inflation–unemployment trade-off revisited: New evidence for policy-making[J]. Journal of Policy Modeling, 2010, 32(6): 758-777.

Daly M C, Hobijn B, Ni T. The path of wage growth and unemployment[J]. FRBSF Economic Letter, 2013, 20: 1-5.

Bureau of Labor Statistics. Union Members 2021[DB/OL].（2022-01）[2022-08-14]:Bls.gov

Bryson A. Union wage effects[J]. IZA World of Labor, 2014.

Siddiqa A, Hussain T, Qasim M, et al. The Impact of Globalization on Unemployment and Economic Growth: Panel Data Analysis for Developing Countries[J]. Bulletin of Business and Economics (BBE), 2018, 7(3): 122-131.

Chan R K H. Globalisation, unemployment and the welfare regime in Hong Kong[J]. Social Policy and Society, 2004, 3(3): 273-282.

David H, Dorn D, Hanson G H. The China syndrome: Local labor market effects of import competition in the United States[J]. American economic review, 2013, 103(6): 2121-68.

Peeters J J W, Garretsen H. 11 Globalisation, wages and unemployment: a new economic geography perspective[J]. The monopolistic competition revolution in retrospect, 2001: 236.

Anderson E. Globalisation and wage inequalities, 1870–1970[J]. European Review of Economic History, 2001, 5(1): 91-118.