Interactive: Wage Growth Tracker
If you’ve seen headlines or social media posts complaining that they can’t find workers, you’re not alone. It’s likely this trend will continue into the ‘21/’22 school year so students will likely have questions. This is a good time to expose students to labor market basics (Video Alternative) so they understand that what employers in some sectors will end up doing is raising wages.
There is no shortage of anecdotal evidence that Covid stimulus payments and increased unemployment benefits have created a lag in improving the employment rate. However, according to Yale and the National Bureau of Economic Research, this is more often not the case.
We also know that for many workers, particularly in sectors with notoriously low wages, that real wages have barely budged in decades. That’s particularly problematic as the costs of healthcare and college have skyrocketed during that same time. It’s important to point out that nominal wages are simply what you are paid, while real wages is the amount of pay a person can expect to receive after factoring in the current inflation rate.
The Federal Reserve Bank of Atlanta Wage Growth Tracker [linked above] is an excellent tool to use with your students. It is important to keep in mind that the tool illustrates nominal wage growth. You can adjust the wages off the top of your head by reducing any growth you see by 2%-3% at each marker.
Here are some discussion starters you can use to follow up using the interactive:
- Why do you think wages go down during recessions?
- Why do you think wages increase during economic expansions?
- What other factors drive up or drive down overall wages?
Do you want to learn more about topics that intersect with personal finance and economics?
- Speaker Series: Integrating Personal Finance & Economics [7/23/21 noon ET]
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- Take our On Demand: $7.25 - The Minimum Wage
P.S. Have you seen our Economics Directory?