>Ryssdal: I want to get to the regulatory part of your job, which you address right there in a second, but I want to first talk about some of the things that came out of the financial crisis that we're still dealing with. And maybe the most relevant for consumers in this economy is the idea that wages now for a decade or more really have been stuck. And the question is: As you consider your dual mandates of price stability and maximum employment, where are wages on your list of things to worry about? And what really power do you have?
>Powell: So wages were low, and that was understandable after the financial crisis because unemployment was extremely high. Unemployment was 10 percent in 2009. As unemployment has declined — now all the way down to 4 percent, the lowest it's been in 20 years — we would have expected wages to move up fairly significantly. We now just in the last year or so, we have seen wages move up.
>Ryssdal: A hair, right?
>Powell: We look at a range of — there's no one wage indicator. We tend to look at sort of the four big ones in particular. And if you look back to five years ago, they were all in the low twos — this is annual rate of increase — and now they're all close to three. So there's been this very gradual move up. I think, you know, part of that is that wages should reflect inflation plus productivity. So if you're delivering more output per hour, it should be reflected. Productivity has been very low. But there is still a bit of a puzzle in that we're hearing about labor shortages now all over the country in many, many different occupations in different geographies. And one would have expected, I would have expected, that wages would move up a little bit more. So I think we don't directly look so much at wages as we do price inflation, but I think we're looking very carefully at maximum employment, and that is one of the things that pushes up wages and price inflation.
>Ryssdal: Right. But why are they stuck? Is it just that we're not producing enough widgets per hour? Is it robots? I mean, what is going on? Because that's the thing that people want to know about.
>Powell: So, one big part of the explanation is certainly that inflation has been low and productivity has been low. So productivity just means how much your output per hour increases. And that's what you should expect as a worker to get paid for, is enough to cover inflation plus how much did your output go. So if you take that at the aggregate national level, if you add those two up, that's actually pretty consistent with what's been happening with wages. So again, there's no — I wouldn't call it a mystery, but I would say that it's a bit of a puzzle given how tight labor markets appear to be. And what we're hearing from employers really is that they can't find workers, and you're wondering, well, why aren’t wages going up faster?
>Ryssdal: Why aren’t they paying them, right?
>Powell: It’s a good question. It’s a good question. We don't really have the answer to that question.
>Ryssdal: Which is a little troubling, if you're the guy running the economy.
>Powell: I don't think of myself as the guy running the economy. You know the economy is a $20 trillion economy.
[0] - https://www.marketplace.org/2018/07/12/economy/powell-transc...