The Great US Wage Stagnation (1973-1994): An Unexplained Mystery

This post explores the causes of the US wage stagnation from 1973 to 1994. The author refutes the idea that globalization caused this stagnation, arguing that NAFTA and China's WTO entry had limited impact. The earlier stagnation period (1973-1994) coincides with a decline in productivity, but its root cause remains unclear. The article analyzes various potential factors, including inflation, de-unionization, financialization, and competition from European and Japanese trade, but none fully explain the two-decade-long wage stagnation. The author suggests it might be a combination of factors, but a simpler explanation is needed to solve this puzzle.