Are Bigger Paychecks On The Way? They Say Yes!
Tired of getting raises that you can jangle in your pocket? This year may be different.
After stagnating for years, wage gains will accelerate in 2014, a wide majority of leading economists predict in USA TODAY survey. The bigger paychecks should help fuel a more rapid recovery.
Average wages have risen about 2% a year since the recovery began in mid-2009, and have been virtually flat after adjusting for inflation. The modest increases have held back consumer spending, which typically accounts for nearly 70% of U.S. economic activity.
But the jobless rate has been falling rapidly, to 6.3% from 8.1% in August 2012. Economists say that as unemployment approaches 6% by year’s end, a more limited supply of available workers will force employers to step up pay hikes.
Scott Anderson, chief economist of Bank of the West, expects average pay increases of close to 3% this year. Robert Mellman of JPMorgan Chase forecasts more modest advances of about 2.2%.
Sources: Jeff Crilley, USA Today