"What explains this sudden boost in lower- and middle-class wages? The answer lies in the post-pandemic American labor market, which has been unbelievably strong. The unemployment rate—defined as the percentage of workers who have recently looked for a job but don’t have one—has been at or below 4 percent for more than two years, the longest streak since the 1960s. Even that understates just how good the current labor market is. Unemployment didn’t fall below 4 percent at any point during the 1970s, ’80s, or ’90s. In 1984—the year Ronald Reagan declared “morning again in America”—unemployment was above 7 percent; for most of the Clinton boom of the 1990s, it was above 5 percent. The obvious upside of low unemployment is that people who want jobs can get them. A more subtle consequence, and arguably a more important one, is a shift in power from employers to workers. When unemployment is relatively high, as it was in the years immediately following the 2008 financial crisis, more workers are competing for fewer jobs, making it easier for employers to demand higher qualifications and offer meager pay. That’s how you end up with stories about college graduates working as baristas for $7.25 an hour. But when unemployment is low and relatively few people are looking for jobs, the relationship inverts: Now employers have to compete against one another to attract workers, often by raising wages. And—this is the crucial part—these dynamics affect all workers, not just people who are out of a job. This helps explain what happened after the pandemic. When the economy first reopened, employers suddenly had to fill millions of positions. Meanwhile, workers—flush with stimulus checks and expanded unemployment insurance—could afford to say no to bad jobs. In response, even famously low-paying companies such as Amazon, Walmart, and McDonald’s started raising wages and offering new benefits to attract employees. What was misleadingly labeled the “Great Resignation” was really more of a great reshuffling, as record numbers of workers quit a job to take a better-paying one. Over the next couple of years, as American consumers kept spending money, demand for labor stayed high. “Low-wage workers are finally getting a small taste of the bargaining power that highly paid professionals experience most of the time,” Betsey Stevenson, a labor economist at the University of Michigan, told me."