Income and Wages

Signs Of Rising Wages

Government figures don't show it, but there is increasing evidence that wages in U.S. labor markets are rising significantly. Economists say the government's figures are missing some important changes in the ways employees are compensated.

  • Government reports peg wage increases at only 3 percent to 4 percent a year, but a survey of companies recently revealed that some 39 percent are now offering signing bonuses.

  • The Bureau of Labor Statistics report on average hourly earnings doesn't include the growing number of workers who are salaried -- 20 percent of the workforce at last count.

  • The BLS's Employment Cost Index doesn't take into account the recent surge in overtime hours worked.

  • Nor does it capture hiring and retention bonuses -- which are becoming increasingly common.

  • Some 29 percent of those companies offering such bonuses were either new or reestablished in the past year.

In addition, many companies offer stock options, which allow employees to purchase their stock at bargain prices. Compensation consultants and business groups agree that cash compensation will probably rise about 4 percent this year.

Source: Kim Clark, "Reasons to Worry About Rising Wages," Fortune, July 7, 1997.

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