Wage gains of three per cent taking hold as US employers ‘need to pay up’
AT CNH Industrial’s factory in Racine, Wisconsin, workers are building bright red Case IH tractors the company’s known for, and they’ll sell for hundreds of thousands of dollars. But there’s something even more valuable on the assembly line: the employees.
CNH Industrial, one of the world’s largest agriculturalequipment makers, needs to increase its Racine workforce of more than 500 by five per cent, and it’s proving tough to do by the January goal.
They’re competing with other big companies with a local presence, including Amazon. com, S.C. Johnson & Son and Harley-Davidson. Management has already raised wages six per cent for production employees in Racine this year, and officials are in talks with the United Automobile Workers union for further increases for skilled tradespeople.
CNH Industrial’s situation shows why hourly earnings are likely to keep picking up after surpassing three per cent for the fi rst time in this expansion, according to figures out last week. A Labour Department report on Tuesday showed US job openings fell in September though remained near a record, exceeding the number of unemployed people by one million. While employers hope to retain and attract workers with better benefits such as extra vacation days, money may be talking louder now.
“We’ve seen a tight labour market for a while, but it seemed like employers were doing everything they possibly could besides raising wages,” said Sarah House, senior economist at Wells Fargo. “It seems that hasn’t been enough. They’re starting to realise, ‘Hey, we just need to pay up a little bit more.’”
The 7.01 million job openings reported for September was 1.05 million more than the number of unemployed US workers. Those numbers lag the Labor Department’s closely-watched jobs report by a month; Friday’s figures showed the unemployment rate held in October at 3.7 per cent, the lowest since 1969.
CNH Industrial, based in the UK, is in particular need of skilled candidates: Each tractor is highly customised, and the tools often require advanced training and experience. Aside from wages, they’re still buttering up employees with perks: The Racine plant’s human resources manager, Susan Prey-Fobes, says she and her colleagues recently grilled 600 burgers to feed workers for lunch.