Why are wages what they are?
"Traditional economic analysis posits that skills and experience and dangers on the job is what determines wages," Larry Mishel says. "But we know that's partly the answer, but it's not all the answer."
Common wisdom might say it's things like experience, negotiated contracts, and job performance that drive that variation. Our guests today disagree.
"If we go from 1979 to 2017, the hourly productivity grew by about 68%," Mishel adds. "But the hourly compensation of the typical worker grew about 13%. That's a 55% gap."
Today, On Point: Our guests say social factors have seeped into the matter of dollars and cents. We'll bust 'the myths of the modern economy' that help set wages.
Jake Rosenfeld, associate professor of sociology at Washington University in St. Louis. Author of You’re Paid What You’re Worth: And Other Myths of the Modern Economy.
Larry Mishel, former president of the Economic Policy Institute. Labor market economist studying jobs, wages and inequality for four decades. (@LarryMishel)
Federico Mazzoli, VP of products at d-Local.
Back in 2018, you did a fairly large survey of employees, aged 18 and above. You asked them what they believe are the most important factors that determine pay. And what did you find?
Jake Rosenfeld: “What stood out from the survey is just how ubiquitous American workers feel that their individual performance is as the most important factor in determining their...
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