In every economic cycle, there's a turning point, and for the U.S., it looks as though that will come in 2014. For the past five years, we've struggled through crisis and recession and a wimpy 2% recovery. That was technically good news but didn't feel much like it, given that unemployment remained at record highs and wage growth was flat. Will that change this year? Yesand no.
Unemployment figures are creeping down, reaching their lowest rates since 2009. Third-quarter 2013 GDP figures were revised up to a whopping 4.1%, which means job growth will likely continue. But the jobs being created aren't like those we've lost. While two-thirds of the jobs lost during the recession were middle-income jobs, about half of those created since have been in low-wage sectors like tourism, hospitality and retail sales. What's more, a greater proportion of them are temp positions than in recoveries past. The result is that although wage growth has begun to pick up a little bit, it's far below what most economists would expect at this stage of a recovery. "America's concern is no longer a jobless recovery but a high-wage-less recovery," says Lindsey Piegza, chief economist for brokerage Sterne Agee.