James Freeman opens his Wall Street Journal with these observations:
Yesterday brought the welcome news of the best wage gains for private-sector workers in more than a decade. Now the latest monthly employer survey from the National Federation of Independent Business, due out later today, strongly suggests that the good news for U.S. workers will continue.
The small-business owners participating in the survey are once again reporting that they are trying to expand their businesses but can’t find enough qualified applicants to fill all of their available positions. Naturally, wages are headed north as firms of all sizes compete for talent.
but this was the paragraph that jumped out at me:
And even as they struggle to find workers, businesses are not giving up trying. A seasonally-adjusted net 22% plan to create new jobs in the October survey. Also, 34% of survey participants reported raising compensation in hopes of hiring and keeping needed employees, historically strong and just three points below September’s record high.
That would be “welcome news” as Mr. Freeman phrased it if true. However, the NFIB survey did not measure rising wages. It’s a measure of the responses of small business owners of their intention to add workers or their statements that they had raised wages. Additionally, most small businesses have a very small number of employees—sometimes just one. What is needed is a salary survey that finds that wages are rising. Even the BLS’s report doesn’t do that. It just tells us whether payrolls (not wages) are rising, falling, or staying the same. Pending more information and better data I’ll hold my water.
I’ve had enough of reading things
By neurotic psychotic pigheaded politicians
All I want is the truth, just give me some truth
The BLS does report hourly wages of private sector non farm workers. It is in the “establishment survey†portion of the monthly report.
In October it shows wages went up 3% in the past year; the highest in a decade.
That’s what the monthly BLS press says. https://www.bls.gov/news.release/empsit.nr0.htm
Hourly workers are just about half of all workers.
Again, that’s good news but we should be cautiously optimistic . 3% is just a smidge above inflation. We will need an extended period of that for real gains to be seen.
Cautious optimism may be fair, especially wrt any attempt to get too quantitative about wage gains. But the trend is positive, and if you are in the hiring market you know that the issue of labor shortage and rising wages is real as a heart attack. Of course, beware. If you are a supporter of wage improving immigration control you will be accused of “demonizing immigrants.”
Meanwhile, the housing market seems to have peaked and is declining. Starts are down, prices are down, inventory is up.
Oops, John Lennon belongs in the next blog entry.
I would agree with Drew that cautious optimism is the right course. Beyond those gains I would also like to see how they are distributed.
Steve
It’s very hard to sell wage cuts, so employers are trying to hold the line on wage increases with other incentives. Or fill in part-time. But they’re hard to find.
“Newly available wage data for 2017 show that annual wages grew far faster for the top 1.0 percent (3.7 percent) than for the bottom 90 percent (up only 1.0 percent). The top 0.1 percent saw the fastest growth, up 8.0 percent—far faster than any other wage group. This fast wage growth for the top 0.1 percent reflects the sharp 17.6 percent spike upwards in the compensation of the CEOs of large firms: executives comprise the largest group in both the top 1.0 and top 0.1 percent of earners.”