Turn on economic news these days and it’s nearly impossible to miss stories about the tight labor market and (depending on how you measure it) moderate wage growth.
The chart below compares the Unemployment Rate and Average Hourly Earnings indexed to June 2009--the official end of the last recession.
Net-net, the unemployment rate has fallen by ~60% while earnings have increased ~30%.
We’ve been diligently working our way through our latest round of AE research and I wanted to share a preview of what I'm seeing. If the AE role were following the larger economy, we would expect to be seeing 2.5% compound annual growth in On-Target Earnings. In other words, a $100K OTE in 2009 should be roughly $124K today.
In reality what we're seeing is much, much bigger.Read More