While the government has some power to affect prices in specific sectors, policy changes can also impact wage growth, something the general population doesn’t typically consider, says Heidi Shierholz, president of the Economic Policy Institute, a non-partisan think tank.
“The public sort of believes that inflation is a policymaker’s fault, and that’s actually almost never true,” she tells CNBC Make It. “The other side of that is the people, when they’re asked in surveys, they take personal responsibility for what happens to their wages, whether it’s good or bad.”
Strengthening labor laws, increasing the minimum wage and improving social safety nets like unemployment insurance are a few ways the government could step in to address lagging wage growth, Shierholz says.
“Minimum wage is not moving at the federal level anytime soon,” she says, adding that many states have recently raised or made plans to increase their minimums, however. Other actions in Congress like the Protecting the Right to Organize Act could help bolster protections for unionization efforts, although the act is not likely to pass anytime soon, Shierholz says.