Must-Read: Jesse Rothstein: The Great Recession and its aftermath: What role do structural changes play?

…particularly for lower-wage workers with little education or formal training, but also for some college-educated and higher-skilled workers…. My research… finds no basis for concluding that the recent trend of stagnant wages and low employment is the ‘new normal.’ Rather, the data point to continued business cycle weakness as the most important determinant of workers’ outcomes over the past several years. It is only in the past few months that we have started to see data consistent with growing labor market tightness, and even this trend is too new to be confident. The continued stagnation of wages through the end of 2014 implies that, at a minimum, a fair amount of slack remained in the labor market as of that late date. In turn, policies that would promote faster recoveries and encourage aggregate demand during and after recessions remain key policy tools.

…particularly for lower-wage workers with little education or formal training, but also for some college-educated and higher-skilled workers…. My research… finds no basis for concluding that the recent trend of stagnant wages and low employment is the ‘new normal.’ Rather, the data point to continued business cycle weakness as the most important determinant of workers’ outcomes over the past several years. It is only in the past few months that we have started to see data consistent with growing labor market tightness, and even this trend is too new to be confident. The continued stagnation of wages through the end of 2014 implies that, at a minimum, a fair amount of slack remained in the labor market as of that late date. In turn, policies that would promote faster recoveries and encourage aggregate demand during and after recessions remain key policy tools.