In this paper we demonstrate that because of stagnating wages and rising job insecurity, there has been a change in the labor supply regime in the U.S. macroeconomy since the 1970s. There is now greater labor supply at any given officially measured unemployment rate. This induced growth in the...

This paper is organized in three parts. First, we present the logic and original evidence for Phillip's Curve and NAIRU. We show that the sources of increased labor supply during the past two expansions have shifted significantly compared with the experience of the 1970's business cycle. The...