Workers Wages in US – Wage growth trailed the prerecession pace in two-thirds of cities where the Jobs Gap is closed

A Wall Street Journal analysis of Labor Department data points to persistent constraints on worker pay, even as the economy approaches full employment. The Journal found 33 U.S. metropolitan areas—from the small to the sizable—where unemployment rates and nonfarm payrolls last year returned to prerecession levels. In two-thirds of those cities—including Columbus; Houston; Oklahoma City; Minneapolis-St. Paul, Minn.; and Topeka, Kan.—wage growth trailed the prerecession pace. Among the reasons:

• Companies tapping pools of workers who have disappeared from the U.S. unemployment tallies, creating what economists describe as hidden slack in the economy. Until this invisible labor supply is spent, these men and women, including part-timers, temporary workers and discouraged labor-market dropouts, could hold wages down.

• The blunt force of overseas competition makes companies reluctant to raise pay over fears they will lose sales to cheaper-priced foreign firms.

• Lingering psychological scars of a recession long past. Robert Gordon, an economics professor at Northwestern University, said his research found that wages and inflation were subject to inertia. That means unemployment could drop well below 5.5% for years before wages go up much.

• Meager growth in productivity, which limits the incentive of companies to offer raises.

Chosen excerpts by Job Market Monitor. Read the whole story at  U.S. Workers Ask: Where’s My Raise? – WSJ.