[US] Salary jump for workers as employers struggle to fill millions of vacancies

US businesses are being forced to offer higher compensation to attract workers following a spring soar in customer demand as the pandemic receded, The Economic Times reports.

Wages and salaries rose at a healthy pace in the three months until June as employers competed to find sufficient workers to fill millions of available job vacancies.

Pay increased by 1 per cent in the second quarter for workers in the private sector, the Labor Department said on July 30. The figure represents a slight decline from 1.1 per cent in the first three months of the year but is still the second-highest reading in more than a decade.

In the year ending June, wages and salaries jumped by 3.5 per cent for workers in the private sector, the largest increase in more than 14 years. That increase was driven by a steep rise in pay for restaurant and hotel workers of more than 6 per cent.

Total compensation for all employees reportedly rose at a slower pace, increasing just 0.7 per cent in the second quarter and 2.9 per cent in the past year. That figure was hampered by weaker wage growth in state and local governments and an unexpected slowing in the growth of benefits like health care. Benefits provided by companies went up by just 0.3 per cent in the second quarter, down from 0.6 per cent in the first.

The July 30 data comes from the Labor Department's Employment Cost Index, which measures pay changes for workers who keep their jobs. Unlike some other measures of Americans' pay cheques, it is not directly affected by mass layoffs such as the pandemic job losses that occurred in the spring of 2020.

Additionally, the government reported on July 30 that consumer spending remained strong in June, rising 1 per cent with overall incomes up 0.1 per cent. The figure includes incomes from other sources besides wages and salaries, such as government benefits and investment income.

Both reports suggest steady hiring and rising pay should continue to fuel economic growth, however, the ongoing spread of the delta variant does present a threat to the recovery. Growth could slow if consumers become more cautious and take a step back on travel, eating out, and visiting entertainment venues.

Companies, particularly in the restaurant and retail industries, are offering signing bonuses, wages as high as $15 an hour and benefits such as retirement plans and pet insurance to secure employees.

The unemployment rate is elevated at 5.9 per cent and millions of Americans are out of work yet there is also a record number of job openings. Economists reportedly say it will take time for the unemployed to match with the right jobs.

Several trends are likely to be prompting workers to remain on the sidelines and adding to the pressure on companies to offer higher pay. Many people continue to be worried about the threat of COVID-19 and are reluctant to work in jobs that require them to interact with the public. Others may be caring for children and unable to work until schools reopen.

An extra $300 a week in unemployment benefits is possibly allowing some of those out of work to wait for higher-paying jobs. However, around 22 states have already ended that benefit and it will expire nationwide on September 6.

US businesses are being forced to offer higher compensation to attract workers following a spring soar in customer demand as the pandemic receded, The Economic Times reports.

Wages and salaries rose at a healthy pace in the three months until June as employers competed to find sufficient workers to fill millions of available job vacancies.

Pay increased by 1 per cent in the second quarter for workers in the private sector, the Labor Department said on July 30. The figure represents a slight decline from 1.1 per cent in the first three months of the year but is still the second-highest reading in more than a decade.

In the year ending June, wages and salaries jumped by 3.5 per cent for workers in the private sector, the largest increase in more than 14 years. That increase was driven by a steep rise in pay for restaurant and hotel workers of more than 6 per cent.

Total compensation for all employees reportedly rose at a slower pace, increasing just 0.7 per cent in the second quarter and 2.9 per cent in the past year. That figure was hampered by weaker wage growth in state and local governments and an unexpected slowing in the growth of benefits like health care. Benefits provided by companies went up by just 0.3 per cent in the second quarter, down from 0.6 per cent in the first.

The July 30 data comes from the Labor Department's Employment Cost Index, which measures pay changes for workers who keep their jobs. Unlike some other measures of Americans' pay cheques, it is not directly affected by mass layoffs such as the pandemic job losses that occurred in the spring of 2020.

Additionally, the government reported on July 30 that consumer spending remained strong in June, rising 1 per cent with overall incomes up 0.1 per cent. The figure includes incomes from other sources besides wages and salaries, such as government benefits and investment income.

Both reports suggest steady hiring and rising pay should continue to fuel economic growth, however, the ongoing spread of the delta variant does present a threat to the recovery. Growth could slow if consumers become more cautious and take a step back on travel, eating out, and visiting entertainment venues.

Companies, particularly in the restaurant and retail industries, are offering signing bonuses, wages as high as $15 an hour and benefits such as retirement plans and pet insurance to secure employees.

The unemployment rate is elevated at 5.9 per cent and millions of Americans are out of work yet there is also a record number of job openings. Economists reportedly say it will take time for the unemployed to match with the right jobs.

Several trends are likely to be prompting workers to remain on the sidelines and adding to the pressure on companies to offer higher pay. Many people continue to be worried about the threat of COVID-19 and are reluctant to work in jobs that require them to interact with the public. Others may be caring for children and unable to work until schools reopen.

An extra $300 a week in unemployment benefits is possibly allowing some of those out of work to wait for higher-paying jobs. However, around 22 states have already ended that benefit and it will expire nationwide on September 6.