Tuesday, August 23, 2011

If You Thought Wages Go Down in a Recession, Think Again

In a recent Trendlines magazine article, economist John Mathews comments:

Contrary to common thought, wages in the state have increased each year of the last decade. As Utah starts to pull out of the recession, the thoughts of how the economy was constrained by lack of demand causing layoffs, no hiring, and curtailed work hours continue to play out. Right along with this is the concept that wages in Utah had to drop because of the recession. Sounds logical. What happened was contrary to common thought. Average wages in the state did increase each year all the way through the 2000’s. That’s not to say we didn’t have a recession. We did. At the business cycle peak in 2007 employment in Utah was 1,250,000. In 2010, well after the official bottoming of the recession occurred in June of 2009, job counts dropped to 1,180,000. That’s evidence of the downturn. Employment declined but average wages increased.

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