scholarly journals Wage Growth after the Great Recession

2017 ◽  
pp. 1-6 ◽  
Author(s):  
Roberto Pinheiro ◽  
Meifeng Yang
Keyword(s):  
Labor Productivity ◽  
Great Recession ◽  
Wage Growth ◽  
Nominal Wage ◽  
Labor Share ◽  
The Great Recession ◽  
Expected Inflation ◽  
Show Evidence ◽  
Weak Growth ◽  
Labor's Share

Nominal wage growth since the Great Recession has been sluggish. We show that the sluggishness is due mostly to weak growth in labor productivity, as well as lower-than-expected inflation. We also find that wage growth since late 2014 has actually been above what would be consistent with realized labor-productivity growth and inflation, and this trend in wages reflects an increase in labor's share of income. We show evidence that this increase in the labor share may be due to a reversal of the trend to replace labor with capital.

Nominal Wage Adjustments during the Pandemic Recession

2021 ◽  
Vol 111 ◽  
pp. 258-262
Author(s):  
John Grigsby ◽  
Erik Hurst ◽  
Ahu Yildirmaz ◽  
Yulia Zhestkova
Keyword(s):  
Great Recession ◽  
Labor Demand ◽  
Wage Distribution ◽  
Nominal Wage ◽  
The Great Recession ◽  
Wage Cuts

In this paper, we show that the pandemic recession has led to frequent cuts in nominal wages. Within three months in 2020, as many wage cuts had occurred as occurred throughout the Great Recession. Unlike employment declines, wage cuts were concentrated at the top of the wage distribution. However, these cuts have been relatively short lived, particularly among high earners. Finally, wage cuts have been concentrated in firms that have seen large employment declines. Wage cuts appear not to be a substitute for cutting employment, at least when the shock to labor demand is this large.

scholarly journals Inflation puzzles, the Phillips Curve and output expectations: new perspectives from the Euro Zone

Empirica ◽  
2021 ◽  
Author(s):  
Giuliana Passamani ◽  
Alessandro Sardone ◽  
Roberto Tamborini
Keyword(s):  
Great Recession ◽  
Phillips Curve ◽  
Forecast Errors ◽  
Explanatory Variables ◽  
Euro Zone ◽  
The Great Recession ◽  
Expected Inflation ◽  
Curve Model ◽  
The Business Cycle ◽  
Output Gaps

AbstractConfidence in the Phillips Curve (PC) as predictor of inflation developments along the business cycle has been shaken by recent “inflation puzzles” in advanced countries, such as the “missing disinflation” in the aftermath of the Great Recession and the “missing inflation” in the years of recovery, to which the Euro-Zone “excess deflation” during the post-crisis depression may be added. This paper proposes a newly specified Phillips Curve model, in which expected inflation, instead of being treated as an exogenous explanatory variable of actual inflation, is endogenized. The idea is simply that if the PC is used to foresee inflation, then its expectational component should in some way be the result of agents using the PC itself. As a consequence, the truly independent explanatory variables of inflation turn out to be the output gaps and the related forecast errors by agents, with notable empirical consequences. The model is tested with the Euro-Zone data 1999–2019 showing that it may provide a consistent explanation of the “inflation puzzles” by disentangling the structural component from the expectational effects of the PC.

scholarly journals The lack of wage growth and the falling NAIRU

2018 ◽  
Vol 245 ◽  
pp. R40-R55 ◽  
Author(s):  
David N.F. Bell ◽  
David G. Blanchflower
Keyword(s):  
Labour Market ◽  
Unemployment Rate ◽  
Great Recession ◽  
Phillips Curve ◽  
Wage Growth ◽  
Considerable Part ◽  
The Great Recession ◽  
The Uk ◽  
Wage Equations

In this note, we argue that a considerable part of the explanation for the benign wage growth in the advanced world is the rise in underemployment. In the years after 2008 the unemployment rate understates labour market slack. Underemployment is more important than unemployment in explaining the weakness of wage growth in the UK. The Phillips curve in the UK has now to be rewritten into wage underemployment space. Underemployment now enters wage equations while the unemployment rate does not. There is every reason to believe that the NAIRU has fallen sharply since the Great Recession. In our view the NAIRU in the UK may well be nearer to 3 per cent, and even below it, than around 5 per cent, which other commentators including the MPC and the OBR believe.

scholarly journals Comparing Real Wage Rates

2012 ◽  
Vol 102 (2) ◽  
pp. 617-642 ◽  
Author(s):  
Orley Ashenfelter
Keyword(s):  
Great Recession ◽  
Real Wage ◽  
Wage Rate ◽  
Preliminary Analysis ◽  
Living Standards ◽  
Nominal Wage ◽  
Important Indicator ◽  
The Great Recession ◽  
Wage Rates ◽  
Real Wage Rate

A real wage rate is a nominal wage rate divided by the price of a good and is a transparent measure of how much of the good an hour of work buys. It provides an important indicator of the living standards of workers, and also of the productivity of workers. In this paper I set out the conceptual basis for such measures, provide some historical examples, and then provide my own preliminary analysis of a decade long project designed to measure the wages of workers doing the same job in over 60 countries—workers at McDonald's restaurants. The results demonstrate that the wage rates of workers using the same skills and doing the same jobs differ by as much as 10 to 1, and that these gaps declined over the period 2000–2007, but with much less progress since the Great Recession. (JEL C81, C82, D24, J31, N30, O57)

scholarly journals Downward Nominal Wage Rigidity in the United States During and After the Great Recession

2020 ◽  
Vol 2020 (001r1) ◽  
Author(s):  
◽  
Bruce Fallick ◽  
Daniel Villar ◽  
William L. Wascher ◽  
◽  
...  
Keyword(s):  
United States ◽  
Great Recession ◽  
The United States ◽  
Wage Rigidity ◽  
Nominal Wage ◽  
The Great Recession ◽  
Nominal Wage Rigidity

scholarly journals European Wage Dynamics and Spillovers

2019 ◽  
Vol 2019 (156) ◽  
Author(s):  
Yuanyan Sophia Zhang
Keyword(s):  
Error Correction ◽  
Labor Productivity ◽  
Euro Area ◽  
Real Wage ◽  
Wage Growth ◽  
Nominal Wage ◽  
Inflation Expectations ◽  
Wage Dynamics ◽  
Error Correction Models ◽  
Short Run

Wage rises have remained stubbornly low in advanced Europe in recent years, but, at the same time, newer EU members are experiencing rapid wage acceleration. This paper investigates the drivers of this wage divergence. Econometric analysis using error correction models suggests that wage growth responds more quickly to changes in unemployment in the newer EU members than in advanced Europe, where wages are more closely related to inflation and inflation expectations in the short run, implying greater inertia in nominal wage rises in advanced Europe. In the years after the global crisis, this inertia contributed to the build up of a real wage overhang relative to sharply slowing labor productivity, which subsequently dragged on nominal wage rises even as unemployment began to decline. Spillovers of subdued wage growth between euro area countries also weighed on wage rises in advanced Europe.

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