As I’ve discussed publicly for some time, I have been trying to make sense of the mixed signals the economy is sending. When I travel across the Ninth Federal Reserve District, the overwhelming concern I still hear from businesses of all sizes is one of a labor shortage. And, yes, wages are climbing, but on average they haven’t been keeping up with inflation. Real wages have been falling. Is this really a tight labor market? Corporate profits are up, and the labor share of income is actually declining. If the labor share isn’t going to increase in this "tight" labor market, when will it?
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