The U.S. labor market works generally on the law of supply and demand. When the unemployment rate is low, and businesses are hiring, employers generally hike wages to attract the workers needed to fill their open jobs. Even with the jobless rate at 3.9 percent in July, and more than 6.6 million job openings, wages are increasing at a relatively slow pace, just 2.7 percent over the past 12 months.
So, why aren’t businesses paying more to get the skilled workers they say they need right now? For some answers, I turned to two economists: one on the East Coast — William Rodgers, chief economist for the Heldrich Center of Workforce Development at Rutgers University in New Brunswick, N.J.; and one on the West Coast — Chris Thornberg, founder of Beacon Economics in Los Angeles.