The Wage Curve

The Wage Curve is an economic concept showing that workers in areas with higher unemployment tend to earn lower wages, and those in areas with lower unemployment earn higher wages. It suggests a natural link between the job market’s health and pay levels: as unemployment rises, wages tend to fall, and vice versa. This relationship occurs because when jobs are scarce, workers have less bargaining power, which puts downward pressure on wages. The Wage Curve helps explain regional wage differences and highlights the interconnectedness of employment rates and income levels across locations.