Sticky wages help explain depressed US sentiment – paper
Lack of salary indexation, rather than inflation, to blame for decline in sentiment, authors find
A failure of wages in the US to keep up with inflation can explain why the country’s consumers remained dissatisfied with the economy after the bulk of the post-pandemic inflation surge had faded, new research finds.
A working paper published this week by the US National Bureau of Economic Research finds US workers tend to see their wages adjusted once a year. The median worker who did not switch jobs saw real wage growth decline from 1% in 2017–19 to -4% during the inflation surge. Those who did
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