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WASHINGTON (AP) — It's a situation that is still baffling economists.
Based on historical trends, the steady drop in unemployment should be boosting wages -- by 3.6 percent in the first five months of the year. But that's not happening.
Even though the unemployment rate is down to 6.1 percent, and employers have added 2.5 million jobs in the past 12 months, most people are still waiting for a decent raise. Friday's August jobs report confirmed that average hourly pay has crept up only about 2 percent a year since the recession ended five years ago.
Some economists think pay will eventually pick up as the job market keeps improving. They think wages have lagged because millions of people are still out of work. Many of them aren't counted in the unemployment rate because they're no longer looking for a job.
But others say they're afraid pay has stagnated because of trends that will continue even after the economy is much closer to full health.
They note that companies have been making more use of temporary and part-time workers, usually at lower pay, to replace full-time permanent jobs. And newer technologies have enabled businesses to produce more with fewer employees.
A survey of Harvard Business School graduates released today lends weight to that notion. Nearly half the respondents said they'd rather invest in technology than in workers.
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APPHOTO NYBZ143: FILE - In this file photo taken, Nov. 30, 2010, nurses at University of Chicago Medical Center in Chicago prepare patient Paula Ellis to be transported for tests. The U.S. job market has steadily improved by pretty much every gauge except the one Americans probably care about most: Pay. Wages are up just 1.3 percent for employees in education and health care. (AP Photo/M. Spencer Green) (30 Nov 2010)
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