These are two graphs from a post over at the Center for Equitable Growth.

The top chart shows that the relationship between unemployment and wage growth isn’t as strong as you’d think. Recent research highlighted by Fed President Bullard made the same observation. But the bottom chart — now that’s what a tight correlation looks like!

I ran a quick, down-and-dirty calculation from FRED data using simple correlation analysis, but I used the employment to population rate and the Y/Y percentage change in average hourly earnings of all employees. Here’s the scatterplot:

The correlation was .68 — pretty high.

Here’s a chart of the prime age employment ratio:

It’s still low; it only just attained levels seen at the low of the last recession, meaning this analysis could be on to something.

Should make up a chart with dots for different country’s percentage of labor union density and dots for wages — and see how they line up.

Get out of your between two oceans myopia folks.

Wages ain’t low anymore. You missing it again.

The Wage Growth relation to Unemployment Rate is NOT linear ash the trend line (1st order polynomial) shows. A far better model is a 2nd order fit which shows an increasingly greater rate of Wage Growth with reduced Unemployment rates.

What isn’t therefore reconciled is the linear relation of Wage Growth with Prime Age employment with it’s non-linear relation to Unemployment rates.

This strongly shows that unemployment rates are unrelated to Prime Age Employment rates… therefore Prime Age Employment isn’t relevant to the Unemployment rate.

So what does comparing apples with oranges have to do with understanding bananas.? Curious observers would like to know.

Classify the Post under “Junk Economics by Junk Economists”

You should look at this:

http://angrybearblog.com/2015/09/wages-and-the-fed.html

It suggest low inflation expectations is keeping wages low.