Wage Pressures in the Labor Market: What Do They Say?



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Summary:

Wage pressures among the newly employed in low-wage service occupations appear to be the result of normal economic forces, likely reflecting demand surges for—and a reluctant supply of—workers in occupations particularly hard hit by pandemic-induced economic shutdowns.

Key findings:

  • There is evidence of significant wage pressures among low-wage service occupations.
  • A combination of surging demand and reluctant supply appears to be driving current wage pressures.
  • It's too soon to know if wage pressures will expand to other occupations.

The Center for Human Capital Studies

JEL classification: J2, J3

Key words: Labor demand, labor supply, reservation wage, COVID recovery, inflation pressures

https://doi.org/10.29338/ph2021-05


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