Worker pay rises strongly

Businesses fight to fill jobs

Wages and salaries rose at a healthy pace in the three months ended in June as employers competed for workers.

WASHINGTON >> 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.

The government also reported Friday that consumer spending remained strong in June, rising 1%, and overall incomes ticked up 0.1%.

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.

ASSOCIATED PRESS FILE A hiring sign is shown in Downers Grove, Ill. The number of Americans collecting unemployment benefits slid last week, another sign that the job market continues to recover rapidly from the coronavirus recession.