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Why Has Wage Growth Been Subdued in the Advanced Foreign Economies? Accessible Data

Figure 1. Euro area: Wage Growth vs. Unemployment Rate

Percent
Date Wage Growth Unemployment Rate
1998 2.25 10.48
1999 2.98 9.78
2000 3.14 8.96
2001 3.28 8.42
2002 3.04 8.67
2003 2.43 9.06
2004 2.03 9.25
2005 2.34 9.09
2006 1.97 8.38
2007 2.61 7.53
2008 3.59 7.59
2009 3.37 9.65
2010 1.43 10.21
2011 2.30 10.22
2012 2.71 11.39
2013 1.59 12.02
2014 1.49 11.62
2015 1.31 10.88
2016 1.40 10.03
2017 1.88 9.08
2018 1.93 8.20
2019H1 2.31 7.67

Source: OECD via Haver Analytics.

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Figure 2. Canada: Wage Growth vs. Unemployment Rate

Percent
Date Wage Growth Unemployment Rate
1998 3.81 8.29
1999 2.43 7.57
2000 6.07 6.83
2001 3.09 7.23
2002 1.94 7.67
2003 1.65 7.58
2004 3.92 7.16
2005 5.40 6.76
2006 4.34 6.29
2007 2.90 6.03
2008 3.35 6.16
2009 2.11 8.36
2010 1.56 8.00
2011 3.13 7.50
2012 2.99 7.33
2013 3.06 7.10
2014 3.34 6.93
2015 0.74 6.90
2016 -0.31 6.99
2017 4.03 6.33
2018 1.09 5.83
2019H1 4.31 5.67

Source: OECD via Haver Analytics.

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Figure 3: Productivity Growth: 2015−2019* vs. 2000−2007

GDP per Hour Worked
Country Average Annual Growth Rate of Productivity, 2015-2019 Average Annual Growth Rate of Productivity, 2000-2007
Canada 0.03 0.91
Euro area 0.24 0.90
France 0.67 1.22
Germany 0.14 1.42
Italy -0.86 -0.12
Japan 0.94 1.95
Spain 0.08 0.02
United Kingdom 0.50 2.12

* Data through 2019Q2. Return to text

Source: OECD via Haver Analytics.

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Figure 4: Germany: Unemployment Rate

Percent
Date Unemployment Rate Natural Rate of Unemployment
2000Q1 8.1 7.7
2000Q2 8.0 7.7
2000Q3 7.9 7.7
2000Q4 7.8 7.7
2001Q1 7.7 7.7
2001Q2 7.7 7.8
2001Q3 7.8 7.8
2001Q4 8.0 7.9
2002Q1 8.2 8.0
2002Q2 8.4 8.2
2002Q3 8.7 8.3
2002Q4 9.1 8.4
2003Q1 9.5 8.6
2003Q2 9.7 8.7
2003Q3 9.8 8.9
2003Q4 9.8 9.0
2004Q1 10.1 9.1
2004Q2 10.3 9.2
2004Q3 10.4 9.4
2004Q4 10.6 9.5
2005Q1 10.8 9.6
2005Q2 11.2 9.7
2005Q3 11.2 9.8
2005Q4 10.8 9.9
2006Q1 10.5 9.8
2006Q2 10.2 9.6
2006Q3 9.9 9.4
2006Q4 9.6 9.3
2007Q1 9.0 9.0
2007Q2 8.6 8.8
2007Q3 8.4 8.5
2007Q4 8.2 8.3
2008Q1 7.8 8.0
2008Q2 7.5 7.8
2008Q3 7.1 7.6
2008Q4 7.1 7.4
2009Q1 7.5 7.4
2009Q2 7.8 7.4
2009Q3 7.8 7.4
2009Q4 7.6 7.3
2010Q1 7.3 7.2
2010Q2 7.0 7.1
2010Q3 6.8 6.9
2010Q4 6.6 6.8
2011Q1 6.2 6.6
2011Q2 5.9 6.4
2011Q3 5.7 6.1
2011Q4 5.6 5.9
2012Q1 5.4 5.8
2012Q2 5.4 5.7
2012Q3 5.3 5.6
2012Q4 5.3 5.5
2013Q1 5.4 5.4
2013Q2 5.3 5.4
2013Q3 5.2 5.3
2013Q4 5.1 5.3
2014Q1 5.1 5.2
2014Q2 5.0 5.2
2014Q3 5.0 5.1
2014Q4 4.9 5.0
2015Q1 4.8 4.9
2015Q2 4.7 4.8
2015Q3 4.6 4.8
2015Q4 4.5 4.7
2016Q1 4.3 4.6
2016Q2 4.3 4.5
2016Q3 4.1 4.4
2016Q4 3.9 4.3
2017Q1 3.9 4.3
2017Q2 3.8 4.2
2017Q3 3.7 4.1
2017Q4 3.6 4.1
2018Q1 3.5 4.1
2018Q2 3.4 4.0
2018Q3 3.4 4.0
2018Q4 3.3 4.0
2019Q1 3.2 4.0
2019Q2 3.1 4.0
2019Q3 3.1 3.9
2019Q4   3.9

Source: Federal Statistical Office via Haver Analytics; OECD via Haver Analytics.

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Figure 5: AFE Wage Growth: Actual vs. Predicted

4-quarter percent change
Date Actual Model 1 Model 2 Model 3 Model 4
2011Q1 1.86 2.10 2.07 1.52 1.63
2011Q2 3.10 2.20 2.14 1.76 1.90
2011Q3 2.53 2.29 2.20 2.08 2.20
2011Q4 2.63 2.33 2.21 2.12 2.22
2012Q1 1.79 2.36 2.21 2.54 2.67
2012Q2 0.80 2.37 2.19 2.20 2.34
2012Q3 1.45 2.39 2.19 2.15 2.28
2012Q4 1.43 2.42 2.20 1.94 2.06
2013Q1 1.98 2.43 2.19 2.02 2.12
2013Q2 2.75 2.44 2.18 2.02 2.09
2013Q3 2.13 2.46 2.18 1.89 1.97
2013Q4 2.70 2.51 2.22 2.04 2.11
2014Q1 2.05 2.61 2.29 2.04 2.13
2014Q2 1.73 2.72 2.38 1.94 2.06
2014Q3 2.16 2.82 2.45 1.90 2.00
2014Q4 2.04 2.91 2.50 2.27 2.35
2015Q1 1.89 2.99 2.55 2.23 2.30
2015Q2 1.71 3.03 2.56 2.36 2.40
2015Q3 1.60 3.09 2.58 2.36 2.38
2015Q4 1.03 3.14 2.60 2.30 2.30
2016Q1 1.13 3.17 2.60 2.24 2.23
2016Q2 1.55 3.25 2.63 2.20 2.19
2016Q3 1.65 3.33 2.67 2.21 2.19
2016Q4 2.22 3.39 2.70 2.21 2.18
2017Q1 2.25 3.50 2.76 2.34 2.32
2017Q2 1.56 3.60 2.82 2.34 2.33
2017Q3 2.26 3.70 2.88 2.48 2.46
2017Q4 2.11 3.83 2.97 2.39 2.36
2018Q1 2.41 3.94 3.04 2.47 2.45
2018Q2 2.81 4.03 3.09 2.53 2.52
2018Q3 2.64 4.11 3.13 2.60 2.59
2018Q4 2.63 4.17 3.17 2.67 2.66
2019Q1 2.04 4.23 3.20 2.63 2.59
2019Q2 2.99 4.30 3.24 2.74 2.69

Source: OECD via Haver Analytics; Consensus Economics.

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Figure 6: Contributions to Wage Growth in Advanced Foreign Economies*

Deviations from pre-GFC average

Percentage points

Date Deviation of Wage Growth from the 2000-2007 Average Unemployment Gap Productivity Inflation Expectations Residual
2011Q1 -0.82 -0.47 -0.83 0.17 0.31
2011Q2 0.42 -0.40 -0.65 0.19 1.28
2011Q3 -0.14 -0.34 -0.39 0.17 0.41
2011Q4 -0.05 -0.33 -0.36 0.16 0.48
2012Q1 -0.88 -0.33 0.07 0.17 -0.79
2012Q2 -1.87 -0.35 -0.26 0.19 -1.45
2012Q3 -1.23 -0.35 -0.31 0.18 -0.75
2012Q4 -1.25 -0.34 -0.53 0.17 -0.55
2013Q1 -0.70 -0.35 -0.44 0.15 -0.06
2013Q2 0.07 -0.36 -0.43 0.13 0.74
2013Q3 -0.55 -0.36 -0.56 0.13 0.24
2013Q4 0.02 -0.32 -0.45 0.13 0.66
2014Q1 -0.62 -0.25 -0.52 0.15 0.00
2014Q2 -0.94 -0.17 -0.69 0.17 -0.25
2014Q3 -0.51 -0.11 -0.80 0.15 0.24
2014Q4 -0.64 -0.05 -0.49 0.13 -0.23
2015Q1 -0.79 -0.01 -0.56 0.11 -0.33
2015Q2 -0.97 0.00 -0.45 0.09 -0.62
2015Q3 -1.08 0.02 -0.47 0.07 -0.70
2015Q4 -1.65 0.04 -0.54 0.05 -1.20
2016Q1 -1.55 0.04 -0.60 0.04 -1.02
2016Q2 -1.12 0.07 -0.67 0.03 -0.56
2016Q3 -1.03 0.11 -0.71 0.03 -0.46
2016Q4 -0.46 0.13 -0.73 0.02 0.12
2017Q1 -0.42 0.19 -0.66 0.03 0.01
2017Q2 -1.12 0.25 -0.71 0.03 -0.70
2017Q3 -0.41 0.30 -0.63 0.03 -0.11
2017Q4 -0.57 0.39 -0.80 0.02 -0.17
2018Q1 -0.26 0.45 -0.78 0.03 0.04
2018Q2 0.14 0.51 -0.78 0.03 0.37
2018Q3 -0.04 0.55 -0.75 0.03 0.13
2018Q4 -0.05 0.58 -0.71 0.03 0.04
2019Q1 -0.63 0.61 -0.78 0.01 -0.47
2019Q2 0.32 0.65 -0.70 -0.01 0.38

* Includes Canada, France, Germany, Japan, and the United Kingdom. Return to text

Source: OECD via Haver Analytics; Consensus Economics.

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Last Update: January 16, 2020