By Ben Leubsdorf
Workers' wages picked up in March, but signs of the long-awaited
acceleration in American paychecks remain elusive.
Average hourly earnings of private sector workers rose last
month by 7 cents to $24.86, the Labor Department said Friday. The
0.3% increase, which was a bright spot in a broadly weak jobs
report, followed a tepid 0.1% rise in February.
But monthly readings can be volatile, and the trend remains
muted. Hourly earnings in March rose 2.1% from a year earlier,
little changed from their 2% annual pace over the past
half-decade.
"I don't think we've seen enough evidence yet to make the call"
that the wage picture is now notably improving, Barclays chief U.S.
economist Michael Gapen said.
For months, many economists have predicted that wage growth
would accelerate because a tighter labor market means employers are
facing increased competition to hire and retain workers. There have
been nascent signs of a pickup, including recent pay-raise
announcements by big employers like Wal-Mart Stores Inc., Target
Corp. and McDonald's Corp.
Those moves, most of which have yet to kick in, have heightened
the competition for low-skilled workers, said Tom Hudson, chief
executive of Nth/Works, a company in Louisville, Ky., that makes
metal parts for automotive and appliance manufacturers.
Mr. Hudson said he's nearly doubled his staff since early 2012,
to 385 today, and hasn't found it difficult to hire production
workers at $10 to $12 an hour. But "ultimately, we're going to have
to end up raising wages to stay competitive," he said. "We're on
the cusp of doing so."
Other companies aren't feeling that pressure yet.
Charles Schwab Corp. hired more than 900 people last year to
fill new and existing positions at offices around Colorado,
including a newly built campus in the Denver suburb of Lone
Tree.
The Colorado labor market is "getting more competitive," said
Brian McDonald, the financial-services firm's senior executive in
the state. But it hasn't tightened to the point where big pay
raises are needed to attract applicants.
"We're hearing of more counteroffers," Mr. McDonald said, but
"we haven't made wholesale changes to our entry-point
salaries."
Mr. Gapen said he thinks wages will pick up later this year as
the U.S. unemployment rate, which was steady at 5.5% in March,
falls toward the Federal Reserve's long-run target range of 5% to
5.2%.
"I'm not disturbed by not seeing it yet," he said. "But the
closer we get to 5% on the unemployment rate and we don't see it,
you start to get a little concerned."
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