Wages are going up across Europe, but why and whether it will last is up for debate.
In the decade since the financial crisis, much of the global economy has recovered and is back on stable footing, but wages in most developed countries have barely budged, The New York Times reports.
An exception to that trend may be Europe, where wages are rising again after years of stagnation, a welcome development not just for working people but also for Mario Draghi, the president of the European Central Bank, who will hold a news conference today after a meeting of the bank’s Governing Council.
The central bank has been pulling out all the stops to push inflation back toward a level considered healthy for growth.
But wage increases are effectively a prerequisite for sustained inflation, and, until recently, the bank had been frustrated by the failure of eurozone citizens’ paychecks to rise along with strong economic growth.
When official data last month showed that hourly wages in the eurozone rose 2% in the first three months of 2018, the central bank got the signal it was looking for. It announced it would end its main stimulus measure at the end of the year. At its meeting on Thursday, the Governing Council reaffirmed that plan.
But economists have not been able to agree on why pay for most people in the United States, Europe, Japan and other wealthy countries had long been stagnant even as unemployment plummeted, while at the same time wages were rising in europe.
Experts attribute the spike to an acute shortage of workers in countries like Germany, but there are many other theories.
