But labor markets aren’t perfectly competitive and workers aren’t simply paid based on what they produce. Workers’ wages are also based on their bargaining power. A lower unemployment rate strengthens the bargaining power of workers, enabling them to obtain larger nominal wage gains. That same stronger demand, however, also increases the pricing power of businesses. With so many eager customers, businesses can charge higher prices. Which goes up more—the bargaining power of workers or the pricing power of businesses—is theoretically ambiguous. The latest evidence, from economists Christopher Nekarda and Valerie Ramey, favors the idea that businesses’ ability to mark up prices over costs, including wages, goes up in a stronger economy—but this question too is far from settled.

There are good reasons to run a hot economy. Bringing in workers whom employers would normally be reluctant to hire—those with, say, a past felony conviction, a disability or lower educational attainment—is genuinely wonderful. But in economics all good things don’t always go together. Millions of new jobs don’t necessarily lead to higher pay for the 150 million workers who are already employed. An observer may decide that the value of those additional jobs more than offsets the cost of inflation-adjusted wage losses, but it isn’t surprising that workers who are falling behind don’t feel the same way.