There's no doubt that the U.S. economy has recovered from the Great Recession, reclaiming the 8.7 million jobs that were lost. But apparently they aren't the same jobs because the average annual wage for new jobs is 23% less than the average annual wage of jobs lost during the recession, according to a new report from the U.S. Conference of Mayors. And there was no wage growth in the latest monthly jobs report, which also showed the economy gaining 209,000 jobs.
"We're stuck in a kind of trap where we see a slowly accelerating economic recovery, but on the wage side it is basically still flat except for those top earners," says Tyler Cowen, economics professor at George Mason University, referring to the top 20% of earners whose wages are rising.
Cowen says wages are fundamentally tied to the productivity of workers, which is affected by foreign competition and technology innovations.
But U.S. productivity since the mid-1960s has more than doubled while wages overall are essentially flat, according to Gerald Friedman, economics professor at University of Massachusetts-Amherst.
Cowen tells Yahoo Finance in the video above that slow wage growth will likely continue. "If you look at the typical American wage, it was as high in the year 2000 as it is today. That's about 14 years of stagnation," he notes. "In my view it is quite possible we will be seeing another 14 years of exactly that same pattern."
So what can people do to buck this trend and get jobs where wages are rising rather than stagnating or falling?
"You either have to work really well with computers or really well with other people -- skills that machines can't replace," says Cowen. "That's the future of our labor markets." He says those jobs are in management, personal services and technology.
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