It was a busy week with a visit by the Minneapolis Federal Reserve President, Neel Kashkari. I will post about that later probably. With the other economic news coming out about the shelving of another vote on healthcare overhaul and the release of a tax plan, wages and income seem to be as relevant now as they were in the last few weeks.
I am getting back to my monetary economics roots with this post. Bloomberg has a really interesting piece (found here). One well known forecasting tool or leading indicator known to the public at-large is the inverted yield curve. After an inversion the economy goes into recession within a few quarters, or so the story goes.
From time to time the calls on the radio turn to questions about the possibilities of market corrections and the likelihood of recession, panic, depression and so on. For the most part these calls died down since 2014 or so, which may just mean they are getting ready to start up again. The number of pages devoted to the examination of economic crises, financial market and otherwise, is long and there are some good and many bad and I try to steer callers to the better ones as much as I can. To that end, Brian Dowd at FocusEconomics wrote up a really nice history of the Tulip Crisis, one of the first financial panic/crisis events we really understand as a bubble. You can find his full post here.
In a recent post I discussed the level of annual salary in several categories for North Dakota and some of the implications. I also discussed the rank for the overall average salary. As many of my students would likely think, there is a need to make a correction to those numbers. There are two things that can vary for those annual salary numbers, the distribution of the workforce and the compensation by occupational category. Continue reading More on North Dakota Wages—Standardized Comparisons
As I consider the current state of the North Dakota economy as well as the economic outlook, I continue to think about labor market issues. Last week on the radio the discussion of wages resonated with the audience, and is obviously a key factor in relieving labor constraints. Realistically, internal demographic issues (low birth rates, outmigration, etc.) and environmental issues (North Dakota winters tend to be cold) could be resolved by appropriate levels for wages. The precise amount of compensating differential is not my target right now, I am just recognizing that such a circumstance could exist.