Low unemployment should mean fast wage growthbut we haven't seen that in recent years.Three economists shared with Business Insider their insights as to why pay hasn't gone up much.The leading reason: Companies are prioritizing shareholder interest over their employees.Unemployment also isn't as low as we believe it to be. Part of the reason more people aren't participating in the workforce is, again, because wages are too low.The US economy is growing at its fastest pace in four years. Unemployment recently sank to an 18-year low. That's all led President Donald Trump to deem America as "the economic envy of the entire world."But, you wouldn't know that by looking at your pay stub. Wage growth has been "sluggish," as Business Insider's Rich Feloni recently reported.Even our nation's top economists are baffled. Such low unemployment should mean that employers are kicking up pay in order to lure in workers. Yet, they're not.There's no single reason for why wage growth has been dismal. Business Insider spoke to three economists to shed light on their theories on the conundrum:Jake Rosenfeld of the University of Washington in St. Louis, Economic Policy Institute senior economistHeidi Shierholz, and Brookings Institution senior fellowJay Shambaugh.Here's what they shared:SEE ALSO:Truck drivers' salaries are experiencing an 'unprecedented' jump, but it's not enough to end the driver shortage that's making everything more expensiveProductivity gains have been minimalA lack of productivity growth could explain the fall in wages, Shambaugh said.Growth in productivity, which is the output we get from every hour of work, has been declining in the US, as well as across advanced economies globally.Labor productivity grew at an average of 2.1% from 1987 to 2004, when it began falling, according to one McKinsey report. But since 2011, labor productivity growth has fallen to an average of 0.7%.Still, wages haven't followed productivity gains in the longer run, according to the Economic Policy Institute. Productivity is up 243% since 1948, but wages are only 109% higher.Companies are increasing their spending on benefitsEmployers have been increasing their spending on benefitsparticularly health insurance, as Pew Research Center reported.There's also retirement-account contributions, transit subsidies, tuition reimbursement, and the like to take into consideration.Wage and salary costs have grown 5.3% costs since 2001, adjusted for inflation, while benefit costs are up 22.5%.While this is, as Shambaugh said, "a pretty small part" of the full picture, it may be keeping down workers' pay in these past few years of economic growth.Corporations are directing more of their money to shareholders and executives, not everyday workersFor decades, corporate profits and employee wages grew at a similar pace. But since 2002 or so, corporate profits have surged past worker compensation. As The New York Times reported in July, "Corporate profits have rarely swept up a bigger share of the nations wealth, and workers have rarely shared a smaller one."Jared Bernstein, an economic adviser to former Vice President Joseph R. Biden Jr., told the Times that workers would have significantly more cash in their pockets had their share of the country's wealth not shrunk so much. In total, that amounts to about $532 billion, or $3,400 per person per year.Meanwhile, the majority of corporate profits have been going to corporate investors and chief executives, whose compensation is often based on stocks, or foreign mergers and acquisitions.See the rest of the story at Business Insider
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