THE world is still in recovery mode fully ten years after the financial crisis of 2008-09. Inflation-adjusted wages grew by an average of 27% in the decade before the crisis in the OECD, a club of mostly rich countries. In the ten years since, real wages have increased by just 8.4%, on average. Ten OECD countries experienced real-wage growth of 30% or more in the ten years to 2007. And in the ten years since, just one OECD member, Lithuania has enjoyed such heady growth. By contrast, real wages have fallen by a fifth in Greece, a country that is still saddled with enormous government debt.

Surprisingly, Britain is one the OECD’s worst performers over the past decade. At 4%, its unemployment rate is at its lowest level since 1975. A relationship first sketched out by William Phillips 60 years ago reckons that when unemployment falls, wages should rise. Yet Britain appears to be increasingly divorced from the “Phillips curve”: a 4% unemployment rate in 1980s Britain would have been associated with a 5% rise in wages. Today wage growth is a weaker 2.9%. Britain is not the exception. Policymakers in America and Germany alike have noted that their low unemployment rates are not yielding significant wage rises for workers.

Read more about Britain’s productivity puzzle here