UNEXPECTEDLY! Rank-and-File Workers Get Bigger Raises.
Wages for rank-and-file workers are rising at the quickest pace in more than a decade, even faster than for bosses, a sign that the labor market has tightened sufficiently to convey bigger increases to lower-paid employees.
Gains for those workers have accelerated much of this year, a time when the unemployment rate fell to a half-century low. . . .
Pay for the bottom 25% of wage earners rose 4.5% in November from a year earlier, according to the Federal Reserve Bank of Atlanta. Wages for the top 25% of earners rose 2.9%. Similarly, the Atlanta Fed found wages for low-skilled workers have accelerated since early 2018, and last month matched the pace of high-skill workers for the first time since 2010.
“A strong labor market makes the bargaining power of lower-paid workers more like the labor market higher-wage workers experience during good times and bad,” Nick Bunker, economist with job search site Indeed.com, said.
Labor Department data paint a similar picture. Average hourly earnings for production and nonsupervisory workers in the private sector were up 3.7% in November from a year earlier—stronger than the 3.1% advance for all employees—implying managers and other nonproduction workers saw a 1.6% wage increase in the past year. The department doesn’t produce separate management pay figures.
Nonsupervisory workers earned an average of $23.83 an hour in November according to the Labor Department; managers earned about twice that rate.
h/t GR