US wages hit fastest growth rate in 25 years, inflation nightmare could turn the page
Financial Associated Press News, January 3 (Edited by Ma Lan)The strength of the US labor market seems to imply “sustainability”.
According to data from the Federal Reserve Bank of Atlanta, in the last 12 months to November 2022, American workers will have a wage increase of 6.2%. Among them, the wage increase of employees who remained in the original company has reached 5.5%, while the salary increase of employees who changed jobs reached 7.7%, both reaching an all-time high in the last 25 years.
Layla O’Kane, senior economist at Lightcast, explained that if Burger King down the street makes $22 an hour, but Dunkin’ Donuts is only $20, employees know the benefits of switching jobs. Employers are well aware of this too, but they don’t want to lose already trained staff, so they will add more salaries internally.
It is a true portrayal of the US labor market for employees to leave for higher pay and for companies to raise wages to retain skilled employees.
But the status quo is likely to continue to support high inflation in the US, as companies often pass higher labor costs on to consumers, again leading to large increases in product prices.
The salary increase is not flattering On the other hand, the employees themselves are not very satisfied with the salary increase. Wages for all private sector workers fell 1.9% in real terms in the 12 months to November as inflation hit 7.1% over the same period, according to the Labor Department.
Paul McDonald, senior executive director at professional personnel firm Robert Half, noted that in industries with high demand for workers, companies are keen to match wage growth with inflation. Naturally, these industries believe that inflation is coming down and the wage increase naturally need not be greater.
But some people think that the salary increase can be increased by another liter. According to a report released by Robert Half in September, more than half of working professionals believe wages are too low, and nearly 40% of workers say they are looking for a wage increase of more than 10% by changing jobs.
Overall, workers’ wages are rising whether or not they skip a job.
According to a survey of more than 1,000 companies, in order to motivate employees, the performance salary increase budget provided by the company in 2023 will be significantly increased, updating the level of the past 15 years.
But new payroll data is also adding to recession fears.
Two-thirds of economists among the top 23 financial players who do business with the Federal Reserve see a US recession in 2023, according to a survey. High wage-driven inflation is turning into a new “nightmare”.
