WASHINGTON — U.S. workers saw their annual wages and benefits rise in the second quarter at the fastest pace in nearly a decade, a sign that the low unemployment rate is forcing employers to raise pay to attract and keep workers.
Pay and benefits for all U.S. workers increased 2.8 per cent in the April-June quarter from a year earlier, the most since the third quarter of 2008. Total compensation for private industry workers — which excludes state and local employees — rose 2.9 per cent, the best since the second quarter of 2008.
The unemployment rate is near an 18-year low of 4 per cent, leaving employers scrambling to find the workers they need. There are more open jobs than there are unemployed workers, according to government data, for the first time since records began in 2000.
A separate measure of wages and salaries for private sector workers rose 2.9 per cent in the past year, matching March’s gain and the highest in nearly a decade.
Still, pay gains slowed in the second quarter. Total compensation — which includes pay and benefits such as health insurance — increased 0.6 per cent, down from 0.8 per cent in the first three months of the year.
Wages and salaries, which make up about 70 per cent of total compensation, slowed even more, to 0.5 per cent from 0.9 per cent in the first quarter.
Even the relatively solid gains aren’t enough to keep up with slightly higher inflation, which rose 2.9 per cent in the 12 months ending in June. That means after inflation, wages and salaries for private sector workers was flat.
The last time the unemployment rate was this low, in 2000, hourly pay gains were rising at a roughly 3.5 per cent to 4 per cent annual rate.
Matt Ott, The Associated Press