Source: EPI

The good news is that, after we added 321,000 jobs in November, the recovery is speeding up. The better news is that wages are finally increasing a little more too, up 2.1 percent the past year. But the bad news, as you can see above, is that there's still a long, long way to go.

That's because, as the Economic Policy Institute points out, wages should normally go up 3.5 to 4 percent a year. The Federal Reserve, remember, has a 2 percent inflation target, so wages should go up at least that much. But workers are also getting more productive—getting more done in the same amount of time—at about a 1.5 to 2 percent rate. (That's even been true the last seven years, when it's averaged a disappointing 1.5 percent). So wages can also go up that much without causing inflation, since there'd be the same amount of money chasing the same amount of goods. Add it up, and you get 3.5 to 4 percent wage growth being consistent with the Fed's target.

But that hasn't happened. Part of that's due to inflation that's been consistently below the Fed's target; indeed, it's just 1.4 percent now. But the rest is due to capital taking a bigger and bigger slice of the economic pie from workers. Increased productivity, in other words, has gone to increased profits instead of increased wages. The result, as you can see, is a big gap between how much workers are making now and how much they would have been making if wages had grown the 4 percent-a-year that they should have. It turns out that seven years of record profits and stagnant pay add up to about a $3.16-an-hour shortfall for workers—or a 12 percent pay cut compared to a world where labor hadn't lost so much bargaining power.

It puts the nine-cents-an-hour pay bump that workers just got in a bit of depressing perspective. America still needs a big raise before the recovery is anywhere near complete.