Wage Curve

The wage curve is an economic concept that shows the relationship between the unemployment rate and wages in a local area or region. Generally, it indicates that when unemployment is low, wages tend to be higher because employers compete more to hire scarce workers. Conversely, when unemployment rises, wages tend to decline due to increased labor supply and less competition among employers. This relationship helps economists understand how regional labor markets respond to changes in employment levels, reflecting the balance between labor demand and supply, and influencing wage-setting in different areas.