On Tuesday morning the labor market got some news.
In an op-ed for the New York Times, JPMorgan Chase CEO Jamie Dimon announced his intention to give 18,000 bank employees a raise.
"Our minimum salary for American employees today is $10.15 an hour (plus meaningful benefits…)," he wrote. "Over the next three years, we will raise the minimum pay for 18,000 employees to between $12 and $16.50 an hour for full-time, part-time and new employees, depending on geographic and market factors."
It's a big raise that will mostly reach branch-level employees, such as the tellers who process your transactions. Under Dimon's plan, the lowest paid workers at Chase (those moving from $10.15 an hour to $12) will still get an 18% raise.
This is a big deal for bank employees, but it's also a big deal for everyone else, because for the first time since the recovery began, it's a sign that the economy is, maybe, actually starting to behave normally again.
For years economists have puzzled over the seeming paradox between slow wage growth and rapid employment gains. Put simply, wages are supposed to follow the ordinary laws of supply and demand. The less there is of something (available workers), the more it should cost to buy (in the form of pay).Yet that hasn't happened. Unemployment has more or less steadily tumbled for years, while wages have barely percolated.
It's enough to make an honest economist start forecasting the LIBOR with tarot cards.
In the face of big job numbers out of June, which did a lot to hold off looming fears of recession from May, that paradox would only be compounded if wages failed to meaningfully move.