WASHINGTON, D.C. — No matter where you look in the country right now, “Now Hiring” and “Help Wanted” signs are everywhere. They are signals that workers are playing a big role in the nation’s economic recovery from the pandemic.
“We have never seen anything like this before,” said Kishore Kulkarni, an economics professor at the Metropolitan State University of Denver.
He said the tight labor market means businesses have no choice but to pay workers more to get them in the door.
“They have to because right now the ball is in labor's court and they are dictating some terms of what the wages should be,” Kulkarni said.
A new survey from the National Association for Business Economics backs that up.
Their October survey found 58% of businesses reported having to increase workers’ pay, up from 51% from their previous survey in July.
NABE’s Ken Simonson said the number of businesses reporting that was a record in the survey’s nearly 40-year history.
“More companies in the survey had raised wages in the last three months than we had ever seen before in the history of this survey,” said Simonson, who is also the chief economist for the Associated General Contractors of America.
Within that, the U.S. Bureau of Labor Statistics reports wages are up 4.5% percent this year. Certain industries are seeing bigger jumps, including construction, with wages up 7.1%, and hospitality, where wages are up 11.2%.
So, what does that mean for the debate over minimum wage?
“I think that minimum wage is much less of an issue than it was even two years ago, just before the pandemic hit,” Simonson said. “I'm sure that there are members of Congress who would still like to raise that floor, but I don't think you're going to see companies that have started offering $14 or $16 and bonuses or college tuition, go back to anything like that statutory minimum wage. So, for now, that's not going to be an issue.”
MSU economics professor Kulkarni said rising wages can be a double-edged sword. Employees benefit from making more money, but some things end up costing more.
“The number one concern is how big is inflation going to be,” Kulkarni said.
It’s a labor and wage situation experts believe will eventually sort itself out.
“In about eight to 10 months, this will all calm down,” Kulkarni said, “but this holiday season looks like a season which is unprecedented and that we will have a tremendous demand for labor.”
It is a holiday season for the job market with the potential to look unlike any before.
