After decades of wage stagnation, workers in the United States are getting a big raise thanks to millions of job openings that are putting prospective hires in their best position in years to demand a better deal from employers.
The employment cost index, which measures wages, salaries and benefits, rose 1.3 percent in the three months ending September, the US Department of Labor said on Friday. That is the biggest jump on records dating back 20 years.
Over the past 12 months, the index gained 3.7 percent.
Wages and salaries spiked 1.5 percent in the third quarter, more than double the 0.7 gain in the second quarter, while benefits also more than doubled from the previous quarter to 0.9 percent.
All sectors saw wage and salary increases, underscoring the broad-based tightness of the US jobs market.
A record 4.3 million Americans quit their jobs in August – that is nearly 3 percent of all employed workers in the US – while the number of job openings hovered near a record 10.4 million.
The number of people walking off the job and the sheer number of job vacancies have become an increasing source of concern for the nation’s economic recovery.
Jobs are officially created only when someone is hired, and the economy added only 194,000 of them in September, marking the stingiest monthly gain this year.
Businesses – especially smaller ones – are scrambling to fill positions. Some 51 percent of small business owners said they had job openings they could not fill in September, according to the National Federation of Independent Businesses.
With so many jobs going begging, employers are increasingly sweetening offers to prospective hires with bigger paycheques, signing bonuses, and better benefits.
A survey out this week by job site Indeed showed that employers offering higher wages and remote work options are best positioned to garner job-seeker interest. The same survey also showed job hunters have significantly less interest in jobs like childcare and warehouse work than they did right before the pandemic, and far more interest in civil engineering and IT jobs.