Federal Reserve President Thomas Barkin made it clear in remarks yesterday that the national economy is strong enough to stomach increasing interest rates
next month, given low unemployment and target-level inflation. Some economists are concerned that this uptick in interest rates will hold back wage
growth further, especially since the bottom quintiles’ wage growth has remained virtually flat
since the 1970s.
Using 1948 as a baseline, the Economic Policy Institute
compared hourly compensation and productivity on a year to year basis. Up until 1970, productivity and hourly compensation increased in lock step with one other, with increased productivity being reflected in increased hourly compensation. From 1970 to present day, productivity has surged but wage growth has been lukewarm.