This past January, the economy added 200,000 jobs and wages grew at the fastest pace in eight years. Looking back, we can remember wages was a major issue in the 2016 presidential election. Some of the loudest views and ways to raise it were put forth by Hillary Clinton (Democrat), Bernie Sanders (Democrat/Independent), and Donald Trump (Republican). While Clinton and Sanders put forward plans to raise workers wages by raising the federal minimum wage, Trump trusted that a more hands-off approach would see results. He stated that if the government stepped out of the way, economic would naturally lead to higher wages. (Note: Liberal economists like Larry Summers, dismissed GOP ambitions as ridiculous.) It seemed this “COULD” have paid off.
Just this January, wages increased 2.9 percent compared to the year before. This is the biggest jump since June 2009. However, The Federal Reserve would like wages to grow even faster (3% or more).
Some economists anticipate that the Republican tax law will also continue to boost wages, due to some large corporations giving their workers raises. (Note: One-time bonuses, which many other companies have given out, are not included in the wage growth calculation.) There is, however, another way that the wages went and could continue to rise. This is when states raise the minimum wage. This is shown with some states raising theirs at the beginning of the year. (It contributed to the overall wages grow) Finally, experts say wages had to rise at some point as the country kept adding jobs and unemployment stayed low.
You should expect this year to be an amazing year for wages. In the words of Joseph Brusuelas, chief U.S. economist at RSM, an accounting and consulting firm, “Friday’s numbers show 2018 will be a year of rising wages and the tightest labor market in over a generation.”
- The unemployment rate stayed at 4.1%, the lowest since 2000 (Friday: Labor Department)
- Construction companies hired 36,000 workers (January)
- Healthcare businesses hire 21,000 (January)
- Restaurants and bars gained 31,000 more employees (January)
- Manufacturing gained 15,000 jobs (January)
- Job gains in November and December were revised down by a cumulative 24,000 jobs than previously reported
- Number of Americans working part-time jobs, but seeking full-time work rose to approximately 5 million workers (January)
- The average workweek declined a bit to about 34 hours a week (January)
- The economy has added jobs for 88 consecutive months (The longest streak on record)
- Unemployment has gone from 10% in 2009 to 4.1% today
- Consumer confidence remains just below its highest point in 18 years
- America has nearly 6 million job openings (near a record high)