Econ 101 says lower price means either not enough demand or too much supply. Lower wages imply lower demand for employees, i.e. fewer jobs. Or maybe too much supply of employees.
Econ 101 says you're assuming zero friction in the labor marketplace and exactly equal negotiating strength between employers and labor with zero collusion between employers, zero collusion between workers.
Now look at the S&P500 level over that time. Could that frankly stunning increase, GFC and all, have been less if there was a bidding war to get the best talent in labor hiring? Is all labor completely fungible?
Then we compare the salaries of senior management of S&P500 companies, who are also labor. No shortage of labor supply there at those salary levels - you, me everyone would have a go for a year at a salary of $X million. CEO salaries have not stagnated. Compare to demand for really awesome programmers which has outstripped supply by massive amounts and all the big companies desperately want to import people to meet some of that supply from overseas. But we don't see the bidding war with salaries going up to even $500k there.
Econ 101 is notice what your assumptions are in your model and think through all of them when applying that model. The assumptions of perfect competition in the labor market are obviously bogus and we need to think harder about what is going on, why and what a good outcome is (about which I'm saying nothing at all here) and how to get to that good outcome than: "The model says X so by definition there's no problem."
Now look at the S&P500 level over that time. Could that frankly stunning increase, GFC and all, have been less if there was a bidding war to get the best talent in labor hiring? Is all labor completely fungible?
Then we compare the salaries of senior management of S&P500 companies, who are also labor. No shortage of labor supply there at those salary levels - you, me everyone would have a go for a year at a salary of $X million. CEO salaries have not stagnated. Compare to demand for really awesome programmers which has outstripped supply by massive amounts and all the big companies desperately want to import people to meet some of that supply from overseas. But we don't see the bidding war with salaries going up to even $500k there.
Econ 101 is notice what your assumptions are in your model and think through all of them when applying that model. The assumptions of perfect competition in the labor market are obviously bogus and we need to think harder about what is going on, why and what a good outcome is (about which I'm saying nothing at all here) and how to get to that good outcome than: "The model says X so by definition there's no problem."