David Autor, Arindrajit Dube and Annie McGrew:

Rapid relative wage growth at the bottom of the distribution reduced the college wage premium and counteracted nearly 40% of the four-decade increase in aggregate 90-10 log wage inequality. Wage compression was accompanied by rapid nominal wage growth and rising job-to-job separations—especially among young non-college (high school or less) workers. Comparing across states, post-pandemic labor market tightness became strongly predictive of real wage growth among low-wage workers (wage-Phillips curve), and aggregate wage compression. Simultaneously, the wage-separation elasticity—a key measure of labor market competitionrose among young non-college workers, with wage gains concentrated among workers who changed employers. Seen through the lens of a canonical job ladder model, the pandemic increased the elasticity of labor supply to firms in the low-wage labor market, reducing employer market power and spurring rapid relative wage growth among young noncollege workers who disproportionately moved from lower-paying to higher-paying and potentially more-productive jobs.