The reasons for stagnant average wages over the last two decades are complex and multifaceted. Each of the statements you provided touches on different economic factors, but some are more accurate or relevant than others. Let's break them down:
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The federal government has not increased the minimum wage in the last 20 years.
- While it's true that the federal minimum wage has not increased significantly in real terms, it primarily affects low-wage workers rather than average wages across the entire workforce. Therefore, while this factor contributes to stagnant wages for certain groups, it does not solely explain the broader trend in average wages.
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Competition from foreign companies has decreased demand for low-skilled workers.
- This is a significant factor. Globalization and competition from foreign markets have led to job outsourcing and offshoring, particularly in manufacturing and other sectors where low-skilled workers are prevalent. This has decreased demand for low-skilled jobs in some regions, impacting wages for those positions.
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There are fewer college-educated workers and more low-skilled workers.
- This statement is somewhat misleading. In many developed countries, including the U.S., there has been an increase in the percentage of college-educated workers over the last 20 years. However, there may still be an oversupply of low-skilled workers, which can suppress wages for that demographic. The shift in labor demand toward higher-skilled jobs also contributes to wage stagnation for those without higher education.
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Overall, there are fewer workers now than there were 20 years ago.
- This statement is not accurate in a general context. The total number of workers has typically increased over the past 20 years, although growth rates can fluctuate due to economic conditions. The labor force participation rate has also varied, especially during economic downturns, impacting the number of people actively seeking work.
In conclusion, the stagnation of average wages over the last two decades can primarily be attributed to a combination of factors like globalization and technological advancements that have restructured job markets, as well as changes in labor demand and supply dynamics. While the minimum wage and the educational composition of the workforce play roles, the broader economic context provides a more comprehensive understanding of wage trends.