The Resolution Foundation, 27th March 2015

Developed economies have slowed since the financial crisis. Yet over the last two years, there have been sharp falls in unemployment in the UK and the US. Had unemployment not fallen in this way, we could blame weak growth on inadequate demand. As it is, we need to accept that the trend growth of developed economies has declined, due to two adverse changes: workforces are growing more slowly and improvements in labour productivity have stalled.
The fact that these changes occurred around the same time as the financial crisis has led many to assume, quite wrongly, that our current malaise is simply part of the aftermath.

This was originally published as part of selection of essays with the title “Securing a pay rise: the path back to shared growth” by The Resolution Foundation

Full paper: Racing Away – Correcting the damage done to wage growth by perverse management incentives by A. Smithers [Resolution Foundation 26.3.2015]