Raises in a State of Stagnation - 5/9/16
Despite steady job growth, the pace of raises and other compensation gains for U.S. workers has stagnated over the past year. As reported in the Wall Street Journal, the employment cost index, a broad measure of workers’ wages and benefits, expanded at a seasonally adjusted zero point six percent during two thousand and sixteen’s initial three months.
For the year, total compensation is up one point nine percent. Wages and salaries, which account for seventy percent of total compensation, are up two percent over the past year. That represents the weakest performance since the second quarter of two thousand and fourteen and is roughly in line with the mediocre gains registered since the recession ended.
Between two thousand and two and two thousand and seven, compensation in America averaged better than three percent growth. Wage gains are staying ahead of inflation, however. Consumer prices have risen less than one percent according to the U.S. Commerce Department over the past year.
Many economists had expected wage gains to accelerate as the nation continues to move toward full employment. Private sector workers have seen their hour earnings rise two point three percent over the past year, government workers one point eight percent.