Excluding the top earners in the US economy, Americans on average have seen nearly a decade of stagnant wages.  Most of us are worse off than we were 8 to 10 years ago due to, in many cases, lower wages coupled with higher prices (for homes, food, gas, cable, etc.).  The structure of our labor markets and capital markets are the cause of this problem.  In short, our market for labor is inefficient, meaning it takes a long time for prices (wages) to adjust to supply and demand.

• Lower to middle workers have little to no bargaining power when it comes to wages.  Only the highest earners have bargaining power.  If a mid-level worker counters a job offer, it is extremely rare for the company to accept the counteroffer.  In nearly all cases, the company will simply say no to increasing their offer, leaving you to either take or leave the offer on the table. 


• There is poor information on salaries, making it more difficult to now the market rates.  In addition, there is little uniformity in job descriptions and responsibilities, and salary information is one of the most confidential information a company holds.  Without accurate information, workers have less bargaining power.  The opposite is true for executive level positions.  Information is available to the public, so candidates for the highest level jobs have information to use in the negotiations.


• The extreme emphasis on quarterly earnings pressures companies to continuously cut costs or hold them flat...in many cases this translates to layoffs or insignificant pay increases for mid to lower level positions.


• In years that companies perform well, upper level workers receive performance-based compensation and bonuses.  When the company performs poorly, salaries are rarely cut for the upper level.  For lower to mid-level jobs in good years, salaries are the same or slightly higher.  In down years, jobs are eliminated, and in many cases, hired back later at lower rates.  Many companies do not have performance compensation plans for lower or mid-level workers.


• Our society discourages an open market for low and mid-level employees.  Workers seen looking for new jobs are regarded as obstinate and lost causes.  Job searching needs to be conducted secretly, and often it is not feasible to leave work during office hours to travel to an interview.  Conversely, when a high level executive position becomes available, it is almost expected that qualified candidates bid for the position.


• Boards of Directors or compensation committees are assigned to make sure upper level candidates accept the job offer, leading to exorbitant salaries.  Lower and mid level positions are determined by either finding the lowest-priced qualified candidate, or by finding the lowest price that any of the qualified candidates will accept.


• When a company hires a position, it interviews multiple candidates within a short period of time to determine the best candidate at the best price.  It is normal for an offer to be made when several qualified candidates are found, so if one does not accept a low offer, there are still other qualified candidates.  When a job seeker looks for a job, often it is over a period of months or even years, so there is little opportunity to compare offers from several positions or several companies. 


• Workers are highly discouraged from leaving a company with fewer than a few years of service.  Most companies see this as a strong negative for a job candidate, limiting the potential for workers to find the highest paying position. 

Undoubtedly there are many more factors than those listed above that cause inefficiency in the US job market.  These are barriers that if not eliminated or surpassed will lead to increasing income inequality and years of stagnant wages for lower and middle class workers.