On Friday the labor department released its latest monthly jobs update. The U.S. added 200,000 new positions in January, higher than expected, but the real surprise was in wage growth. Hourly earnings rose 0.3 percent in January, enough to lift the annual rate up to 2.9 percent.
“This may be the start of a welcome trend in wage gains, and marks the highest percentage increase in average hourly earnings since 2009,” said the U.S. secretary of labor, Alexander Acosta.
A tightening labour market and unemployment at 4.1 percent (a 17-year low) appears finally to be making its way into people’s pockets as employers are forced to raise wages in order to attract talent.
But the big numbers hide an ominous trend. For many Americans, slow wage growth isn’t just a hangover of the post-2008 “great recession.” For those without a college degree the sluggish rate of growth can be traced back to the 1970s, and the more recent slump deepened that inequality.
The latest jobs figures show that wages for “production non-supervisory” positions — the bottom 83 percent of the jobs market — grew at 2.4 percent. Elise Gould, senior economist at the Economic Policy Institute, said that suggested gains for those in more senior positions were far greater than the 2.9-percent headline rate.
Enjoy curated articles directly to your inbox.