Kuttner: rising wages, rising employment vs. falling wages, falling employment

Robert Kuttner notes an interesting tidbit from, wouldn’t you know it, the Wall Street Journal: since 2001, wages in Europe have been keeping up with inflation and the employment rate has also been rising. Yet in the US, wages have been falling behind the inflation rate and the employment rate has also been sagging. This flies in the face of the conventional economic “wisdom,” which assumes that businesses will hire more workers when the (real, i.e., adjusted-for-inflation) wage is lower. Oh that wacky reality!

[Conflict of interest alert: Kuttner’s post is on his blog promoting his new book, Obama’s Challenge. I work for the publisher of the book.]