Wages And Benefits Growing At 2-Year High, Outpacing Expectations
Nice…
WASHINGTON – Wages and benefits paid to American workers rose in the July-September period at the fastest pace in more than two years.
The Labor Department reported that its Employment Cost Index was up 1 percent in the third quarter, compared to a 0.9 percent rise in the April-June period. It was the biggest quarterly increase since a similar 1 percent rise in the second quarter of 2004.
The increase, which was above the 0.9 percent rise that economists had been expecting, was led by a big jump in the cost of employee benefits such as health insurance and pensions.
For the third quarter, benefit costs rose by 1.1 percent, up from a 0.8 percent gain in the second quarter. Wages and salaries were up 0.9 percent, matching the increase in the second quarter.
I think the continued low employment is mostly the cause of this. When unemployment is low the pool of available labor for business is, obviously, smaller. This means businesses must compete against one another more to attract qualified employees, which in turn means that businesses raise compensation levels (wages and benefits) to make their positions more attractive.
This is a very, very positive thing for our economy.
Further, I’d also point out that it is evidence in support of my “all jobs are good jobs” theory. Many, especially here in my home state of North Dakota, rail against “Wal-Mart jobs” or “McJobs” as not being good enough for our economy. The truth of the matter is that they are good enough, because the creation of any job, be it as a burger flipper or an engineer, is a sign of economic growth. As economic growth advances and competition for workers increases because of lower unemployment compensation levels go up.
We cannot expect to control a free economy. Trying to dictate which “type” of jobs we’re going to have in our economy is nonsense. What we should promote is economic growth, and that means the encouraging the creation of all types of jobs. We do that, and our economy will be just fine.
Update: This is how the AP chooses to report this good economic news:
Right. Wouldn’t want to report that wages are up or anything right before the election. Tags: Domestic Issues, Economy, Politics
