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Higher Hourly Wages in January - 2/16/16

According to recent U.S. Labor Department data, hourly pay for American workers rose significantly in January.  Specifically, average hourly earnings increased by zero point five percent to twenty five dollars and thirty nine cents.  January marked the second best one month gain of the current expansion, which traces back to two thousand and nine. 

Over the past year, hourly wages are up two point five percent, again one of the best performances since the onset of recovery.  But as reported by the Wall Street Journal, there are a few things one should consider when interpreting the data. 

First of all, Januaries generally tend to be associated with wage increases.  This may be because many employers implement wage and salary increases to coincide with the New Year.  Moreover, the minimum wage rose in fourteen states to start the year. 

For instance, minimum wage levels in California and Massachusetts rose by a dollar to ten dollars an hour.  According to the Economic Policy Institute, about four point six million people realized an increase in their first paycheck because of minimum wage increases, about three percent of the workforce. 

The data also indicate that managers are receiving faster compensation increases than production and non-supervisory workers.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.