Wages for working class Americans are increasing faster than for their bosses as the U.S. economy keeps humming and unemployment rates stay low, The Wall Street Journal reported Friday.
The wage increases are a sign that the labor market is tightening to a point where it is giving low wage employees leverage for raises. A short supply of workers and an increase of poaching and headhunting among employers are helping those at the bottom climb up the pay scale, the report notes.
Pay for Americans on the bottom pay scale rose 4.5% in November from last year, whereas wages for the top 25% of earners rose 2.9%, the WSJ reported, citing data from the Federal Reserve Bank of Atlanta. Wages for low-skilled workers have skyrocketed since 2018, the Atlanta Fed found.
Corporations are feeling the effect, according to TheWSJ. “The effective labor pool is smaller than what it has been in the past,” Tony Darden, president of Mooyah Burgers, Fries & Shakes, a restaurant chain based in Plano, Texas, told the WSJ.
Darden added: “As you look to bring on folks, ultimately higher wages are used to attract them.” (RELATED: More Americans Credit Trump With Good Economy Than Obama)
Darden’s company is competing for workers with other restaurants. Mooyah increased wages 8% in 2019, with much of that flowing to entry-level workers, he said, adding that managers and supervisors are seeing less of a premium than their subordinates as a result.
Americans are apparently noticing the effects. Nearly 76% of those polled in a Dec, 20 CNN poll believe that the economy is either “very or somewhat good,” the highest percentage in nearly 20 years, when 80% said that the economy was doing well.
The poll also shows improvement from President Donald Trump’s first few days in office, when only half of the population viewed the economy as a net positive.
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