HKS Affiliated Authors


October 29, 2021, Opinion: "Over the last three months, US nominal compensation, wages and benefits not adjusted for inflation, rose at a rapid 5.4 percent annual rate for all civilian workers—leaving it 0.6 percent above its pre-pandemic trend, according to newly released Employment Cost Index (ECI) data from the Bureau of Labor Statistics (BLS). This is notable because the very high unemployment rate over the last year would have been expected to exert downward pressure on nominal compensation, as it did during the global financial crisis. Instead, the fast pace of nominal compensation growth is consistent with other indicators, especially job openings and quits, which suggest the labor market is considerably tighter than it would seem given the high unemployment rate and low labor force participation rate."

HKS Authors - Jason Furman and Willie Powell