Today’s jobs report leads one to contemplate the relationship between full employment, bargaining power and inequality.

Here’s my thesis, tying those concepts together: In an economy with too little worker bargaining power and too much inequality, the benefits of closing in on full employment are powerful and equalizing.

We can start unpacking that thesis by recognizing that most American workers typically have too little power to bargain for a fair share of the growth they’re helping to generate. One way to track that dynamic is to consider the extent to which mid-level pay used to track overall growth, until around the mid-1970s, as you can see here.

What happened to open that gap? A lot: Declining union membership; the rise of finance (a sector known for outsized economic gains, without a lot of productivity to show for them); the concentration of big firms in key industries (retail, health care, tech) with the ability to set labor standards; the abandonment of such standards (minimum wages, overtime pay) by the federal government; and the related rise of a conservative politics hostile to an amply funded, functional government sector that could help offset the loss of bargaining clout by the working class.

Also, until quite recently — and this gets us into today’s job report — full employment job markets were the exception, not the rule, in the United States. Too-tight monetary policy by the Federal Reserve, fiscal austerity by governments and a critical technical mistake by influential economists (they thought the lowest level of unemployment consistent with stable inflation was a lot higher than it really is) led to persistent periods of labor market slack.

Today, however, we have an unemployment rate that has averaged just below 4 percent for the past year (it was 4 percent in January, but it was slightly elevated due to the government shutdown; that will reverse next month). To this day — recall the economists’ mistake to which I just referred — influential institutions maintain the full employment is consistent with a higher jobless rate of 4.4 percent (the Federal Reserve) or 4.6 (Congressional Budget Office). And yet, we don’t see low unemployment pushing up inflation much at all.

Thankfully, the economy, and just as important, top officials at the Fed, are ignoring these incorrectly perceived constraints and unemployment has thus been historically low for a while. This, in turn, is giving workers a bit more bargaining clout, as employers must bid pay up to compete for them in a way that doesn’t occur at jobless rates north of 5 percent.

The figure below shows yearly growth rates of middle-wage workers plotted against the rate of inflation. When the wage line is above the inflation line, it means the buying power of the paycheck is going up. As the jobless rate hit 4 percent or lower this year, wage growth accelerated and is now around 3.5 percent. At the same time, due mostly to falling energy prices, inflation has come down. The figure includes my forecast for the month’s inflation at 1.6 percent, almost 2 percent below inflation. That’s some serious real wage growth.

Caveats abound. My forecast could be off, but it’s just one month so that won’t change the story. More likely, energy prices could bounce back and swallow up some of these real gains. And as you know if you follow the business press, there are economic head winds out there, including slower growth in Europe and China, financial market volatility, and seemingly endless Trumpian chaos. But given the persistent strength of the labor market, with average monthly job gains of 234,000 over the past 12 months (a hefty number for this stage of the expansion), I’m confident that nominal wage growth will continue to surpass inflation.

Of course, the biggest caveat is that a few good months doesn’t counteract years of working-class real wage stagnation. Moreover, as is the case in an era of inequality, growth over this period mostly accrued not to middle and low-income wage earners, but to those with high levels of wealth and capital assets (along with high wage earners). You can see this is the figure below showing the decline in recent years in labor’s share of national income.

That’s the long-term trend, but we’ll never correct a long-term trend without sustaining a more favorable short-term trend, and that’s one reason the recent real gains for lower-paid workers are so welcomed. In fact, as closing in on full employment helps to shift bargaining power from capital to labor, that line in the above figure will begin to climb, and workers’ share of national income will start to rebalance.

So, let’s revisit the thesis, put a bit differently now that we’ve got some analysis under our belts: In an economy that’s closing in on full employment, increased worker bargaining power enables those formerly left behind to get a bigger slice of the pie they’re helping to bake.

Even some who depend on portfolios as a opposed to paychecks might recognize that result as not just fair, but essential if we want more people to feel they have a legitimate stake in this ongoing experiment we call America.