Finally, a Raise

American workers are finally getting something they haven’t had in a long time — a raise.

Here’s CNBC’s Alex Rosenberg:

After years of seeing salaries stagnate, U.S. earners are finally starting to make slightly more, with signs pointing to further wage increases to come. Yet the additional compensation could be bad news for the businesses that find themselves forced to pay up. The extra labor expense is expected to cut into profit margins, and consequently diminish returns for investors, according to some analysts.

“What’s happening is that Wall Street and Main Street have switched places,” Eddy Elfenbein of Crossing Wall Street wrote to CNBC. “Workers are finally getting wages while corporate profit growth has stalled. In the early stages of the recovery, it was the other way around—profits soared while jobs stagnated.”

Indeed, employee compensation is finally showing signs of life.

In a much heralded boost, average hourly earnings for private workers rose to $24.75 in January, a 2.2 percent year-over-year increase. And thanks to a mix of higher wages and more people working, total compensation of employees in the fourth quarter rose 4.7 percent year over year, according to the revised U.S. growth report report released on Friday.

Here’s the monthly increase in real average hourly earnings:

Posted by on March 1st, 2015 at 7:37 pm


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