indeed, with the well - being of most people in the world today. although average economic well - being has increased considerably over time, the degree of inequality in economic outcomes has increased as well. importantly, rising inequality is not a recent development but has been evident for at least three decades, if not longer. 2 the data on the real weekly earnings of full - time wage and salary workers illustrate this pattern. in real terms, the earnings at the 50th percentile of the distribution ( which i will refer to as the median wage ) rose about 11 - 1 / 2 percent between 1979 and 2006. over the same period, the wage at the 10th percentile, near the bottom of the wage distribution, rose just 4 percent, while the wage at the 90th percentile, close to the top of the distribution, rose 34 percent. 3 in 1979, a full - time worker at the 90th percentile of the wage distribution earned about 3. 7 times as much as a full - time worker at the 10th percentile. reflecting the relatively faster growth of wages of higher - paid workers, that ratio is 4. 7 today. the gap between the 90th and 10th percentiles of the wage distribution rose particularly rapidly through most of the 1980s ; since then, it has continued to trend up, albeit at a slower pace and with occasional reversals. the long - term trend toward greater inequality seen in real wages is also evident in broader measures of financial well - being, such as real household income. 4 for example, the share of income received by households in the top fifth of the income distribution, after taxes have been paid and government transfers have been received, rose from 42 percent in 1979 to 50 percent in 2004, while the share of income received by those in the bottom fifth of the distribution declined from 7 percent to 5 percent. the share of after - tax income garnered by the households in the top 1 percent of the income distribution increased from 8 percent in 1979 to 14 percent in 2004 ( congressional budget office, 2006 ). 5 even within the top 1 percent, the distribution of income has widened during recent decades. 6 the measures of inequality i have cited reflect " snapshots " of a single time period, usually a year. consequently, they may not tell a complete story about the extent of inequality or its trend. for example, the fact that an older, more - experienced worker earns more than a newly hired employee will this result is calculated using the data on compensation

to reconcile these numbers, but to do so involves a lot of movement of people from furlough, unemployment and inactivity, in ways not so far seen. there are a number of possible outcomes to this puzzle, which have different implications for the labour market. the first is that the furloughed workers will largely be re - absorbed into their old jobs, and so even with a further reduction in unemployment and inactivity, we are left with an excess of job vacancies. if these excess vacancies are associated with shortages of workers in particular sectors, this may push up on wages. this could also happen if furloughed workers do not return to their old jobs, but are not suitable for those jobs and sectors where there are a high number of vacancies. in other words, there is a mismatch in the labour market. such an outcome is likely to raise the rate of unemployment consistent with stable wage growth i. e. the nairu. the second outcome is different. vacancies may be temporarily higher, and above their steady state level in the short - run, if firms are anticipating that it will be harder to find workers in the future when unemployment falls. in that scenario, demand picks up, the impact of matching frictions in the labour market dissipate over time, and both vacancies and unemployment fall. the nairu would be less affected in this scenario. another possible explanation is that the level of advertised vacancies is elevated due to employers overestimating the growth of demand to come just as the speed of the recovery falls off. in this case, some of the vacancies turn out not to be jobs as employers change their mind, or at least hiring is put back. the implications of these labour market outcomes are quite different for growth, inflation, and thus monetary policy, which illustrates the uncertainty we face. before turning to inflation, i want to say something on earnings. on the face of it, headline earnings are elevated. pay growth of around 8 % for july ( the latest available number ) is very high. but there are a couple of covid - related distortions that have been pushing up on this growth : there is a large base effect from the fall in average earnings last year, and a compositional effect from the pattern of impact of covid on activity across the economy and how that relates to typical pay rises by type of job [ 2 ]. all of that said,