The US economy is running at close to capacity, with only 3.8 percent unemployment. Finally, after years of unrequited anticipation, we are seeing some reasonable wage growth.

Despite the 2.7 percent year-over-year current reading, this gain falls short of the close to 4 percent nominal increases seen historically during periods of low unemployment.

This suggests it might be worth exploring whether specific structural changes today might persist in the future to hold down income growth to below 3 percent annually. Studies have carefully examined how labor is less unionized, with limited bargaining power; is less interested in moving geographically; is less productive somehow (maybe that three plus hours a day staring at our cellphones?); and includes a large pool of workers sitting on the sidelines, who are technically not workforce "participants" since they are not officially seeking a job.

All these elements may contribute to wage stagnation, inhibiting the traditional response of higher pay to the shortage of workers. However, the last point, suggesting that the real unemployment rate has been higher than "officially" stated, best explains why employers have not needed to offer much higher wages to induce new workers in many sectors.

It is also clear that the private sector cannot blame weak profits for the lack of wage growth to its employees. As the chart below illustrates, operating and reported margins have doubled since 1994, at least for the S&P 500 companies.