Worker pay rises strongly as businesses fight to fill jobs

Jul 30, 2021, 6:04 AM | Updated: 11:49 am
A hiring sign is shown in Downers Grove, Ill., Thursday, June 24, 2021. The number of Americans col...

A hiring sign is shown in Downers Grove, Ill., Thursday, June 24, 2021. The number of Americans collecting unemployment benefits slid last week, another sign that the job market continues to recover rapidly from the coronavirus recession. Jobless claims dropped by 24,000 to 400,000 last week, the Labor Department reported Thursday, July 29, 2021. (AP Photo/Nam Y. Huh, File)

(AP Photo/Nam Y. Huh, File)

WASHINGTON (AP) — Wages and salaries rose at a healthy pace in the three months ended in June as employers competed to find enough workers to fill millions of available jobs.

Pay increased 1% in the second quarter for workers in the private sector, the Labor Department said Friday. That’s down slightly from 1.1% in the first three months of the year but still the second-highest reading in more than a decade.

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

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

Friday’s data comes from the Labor Department’s Employment Cost Index, which measures pay changes for workers that keep their jobs. Unlike some other measures of Americans’ paychecks, it isn’t directly affected by mass layoffs such as the pandemic job losses that occurred in the spring of 2020.

Separately, the government also reported Friday that consumer spending remained strong in June, rising 1%, and overall incomes ticked up 0.1%. That 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, though the ongoing spread of the delta variant poses a threat to the recovery. If consumers become more cautious and pull back on travel, eating out, and visiting entertainment venues, growth could slow.

Businesses are being forced to offer higher compensation to attract workers, as customer demand has soared in the spring as the pandemic faded. Companies, particularly in the restaurant and retail industries, are offering sign-on bonuses, wages as high as $15 an hour, and benefits such as retirement plans and pet insurance.

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

Several trends are likely keeping some workers on the sidelines, adding to the pressure on companies to offer higher pay. Many people are worried about 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.

And an extra $300 a week in unemployment benefits is likely allowing some of those out of work to hold out for higher-paying jobs. About 22 states have ended that benefit and it will expire nationwide Sept. 6.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE  - Nobel Peace Prize winners Dmitry Muratov from Russia, right, and Maria Ressa of the Philipp...
Associated Press

2021 Nobel Peace Prize winners have faced a year of battles

WASHINGTON (AP) — Winning the Nobel Peace Prize often provides a boost for a grassroots activist or international group working for peace and human rights, opening doors and elevating the causes for which they fight. But it doesn’t always work out that way. For the two journalists who won the Nobel Peace Prize in 2021, […]
7 hours ago
FILE - This Nov. 19, 2019 photo shows a Peloton logo on the company's stationary bicycle in San Fra...
Associated Press

Peloton to cut 500 jobs as turnaround efforts continue

Peloton is looking to trim hundreds of jobs as the company continues to reorganize its business which has stalled as the coronavirus-related surge fades. The maker of high-end exercise equipment plans to cut approximately 500 jobs, or about 12% of its workforce. “A key aspect of Peloton’s transformation journey is optimizing efficiencies and implementing cost […]
7 hours ago
Associated Press

11 turkey farm workers charged with cruelty caught on video

Eleven people working for one of the nation’s leading turkey producers have been charged with animal cruelty in Pennsylvania after state police said they were caught on video kicking, stomping and beating turkeys at several farms. The workers were responsible for capturing and crating turkeys destined for slaughter, Pennsylvania State Police said Thursday. They launched […]
7 hours ago
U.N. High Commissioner for Human Rights Michelle Bachelet speaks during the opening of the 41th ses...
Associated Press

UN rights body rejects Western bid to debate Xinjiang abuses

GENEVA (AP) — In a close diplomatic victory for China, the U.N.’s top human rights body on Thursday voted down a proposal from Britain, Turkey, the United States and other mostly Western countries to hold a debate on alleged rights abuses against Muslim Uyghurs and other ethnic minorities in China’s western Xinjiang region. At the […]
7 hours ago
Hiring sign is displayed in Deerfield, Ill., Wednesday, Sept. 21, 2022. The number of Americans fil...
Associated Press

US applications for jobless benefits increased last week

WASHINGTON (AP) — More Americans filed for unemployment benefits last week, the largest number in four months, but the labor market remains strong in the face of persistent inflation and a slowing overall U.S. economy. Jobless claims for the week ending Oct. 1 rose by 29,000 to 219,000, the Labor Department reported Thursday. The previous […]
7 hours ago
FILE - Cherelle Griner, wife of WNBA star Brittney Griner, speaks during a news conference in Chica...
Associated Press

Brittney Griner at ‘weakest moment’ in Russia, her wife says

WASHINGTON (AP) — WNBA star Brittney Griner is at her “absolute weakest moment in life right now” as she faces a hearing in Russia later this month for her appeal of a nine-year prison sentence for drug possession, Griner’s wife said in an interview aired Thursday. Cherelle Griner told CBS “This Morning” that her wife, […]
7 hours ago

Sponsored Articles

...
Quantum Fiber

How high-speed fiber internet can improve everyday life

Quantum Fiber supplies unlimited data with speeds up to 940 mbps, enough to share 4K videos with coworkers 20 times faster than a cable.
...
Day & Night Air Conditioning, Heating and Plumbing

Ways to prevent clogged drains and what to do if you’re too late

While there are a variety of ways to prevent clogged drains, it's equally as important to know what to do when you're already too late.
...
Day & Night Air Conditioning, Heating and Plumbing

Most plumbing problems can be fixed with regular maintenance

Instead of waiting for a problem to happen, experts suggest getting a head start on your plumbing maintenance.
Worker pay rises strongly as businesses fight to fill jobs