Mystery of wage growth in the US

The US is doing well in terms of the job market. Unemployment rate is the lowest since the 2000s and wages seem to grow too. However, workers' experience is different than what the media tells.

The Bureau of Labor Statistics (BLS) shows that the unemployment rate in the US is the lowest since 2000, currently standing at 4%. They also said that the wage growth is the highest since 2009 with an approximately 3.1% annual rate. (The US had added around 220000 jobs over the last three month and the average hourly earnings for private workers also had the biggest growth since 2009, currently standing at 27.3$)

This might make us think that the US is prospering, but the reality is much more complex. The biggest flaw of relying on these statistics is that it completely misses out the Consumer Price Index (CPI). If we take into account the inflation-adjusted numbers there is only 1% growth of wages currently.

We can now see that the income of workers didn't actually grow that much. A crucial explanation can be the weak bargaining power of the workers due to weaker unions and increased market concentration. In my view, the fear of automatization has already started to play a role in this problem, and as time will pass, this danger may increase thus making unions even weaker. If staying untreated, this can result in distress amongst the working class, which may have more unwished consequences. These can be summed up as marginalization, which can have a bad impact on both physiological and psychological health, behavior and the way of thinking.

On another note, I think it is also worth to note a Brookings commentary on a study by Carol Graham: "Happiness for All: Unequal Hopes and Lives in Pursuit of the American Dream" (Princeton University Press 2017). One of the commentary's main conclusions is that the US is facing even more current problems; due to unequal opportunities and income there is a rising rate of mortality due to premature deaths (suicide, opioids, and alcohol poisoning, among others).

(sources: CNBC, Bureau of Labor Statistics, BBC, Forbes, Brookings, Financial Times)