America's Low-Wage Rut

America's Low-Wage Rut
AP Photo/LM Otero

There's a disturbance in the force of the U.S. economy. An airline canceled flights because it couldn't find enough pilots to steer them. Despite high demand, homebuilders in Colorado are throttling back activity because they can't find the workers to erect frames. Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.

This state of things has left analysts stumped. For nearly a decade, the Federal Reserve has kept interest rates at extraordinarily low levels in order to initiate growth and rising demand, inflation, and ultimately higher wages. But the higher wages have been stubbornly slow to materialize. Americans are working—but they're not making more. Which really means that they're making less. Average hourly earnings have risen just 2.5 percent in the past 12 months.

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