Increase Financial

CONNECT

Address:

7335 Highway 6 Ste 250
Missouri City, TX 77459

Phone:

281-778-8161

Fax/Other:

281 605-1995

Wage Growth: Watching for a Tipping Point

In April 2018, average hourly earnings for private-sector U.S. workers grew at a 2.6% annual rate, and “real” wage growth (adjusted for inflation) increased just 0.2% year over year. The unemployment rate fell to 3.9% in the same month, a 17-year low that leaves many people wondering why workers are not seeing corresponding wage increases.1

Wage gains usually go hand in hand with low unemployment, primarily because employers must often raise pay to keep valuable employees and compete for new workers. For example, the last time unemployment fell below 4.0% was in December 2000, when wages were growing at a brisk 4.3%.2

An April 2018 survey of leading economists conducted by The Wall Street Journal identified three major factors contributing to slower wage growth: globalization, demographic changes, and low productivity growth.3 Here’