this Sept. 4, 2014 file photo, protestors demonstrate to
push fast-food chains to pay their employees at least $15 an
hour, in Philadelphia. Employers in the United States are
hiring at a brisk pace. Unemployment has sunk to a nearly
healthy rate. Jobs are being filled across a range of
industries. Yet the September jobs report released Friday,
Oct. 3, 2014 contained a puzzling fact: Paychecks still
aren't growing. Economists regard stagnant wages as a red
flag for the 5-year-old recovery. Robust job growth has
typically fueled rising wages. And without higher pay,
workers have less money to spend and save, and that, in
turn, keeps the economy from strengthening further.
U.S. businesses were much less likely to boost pay in the third
quarter than in previous months, even as hiring remained healthy,
a sign that wage gains may remain weak in the coming months.
survey by the National Association for Business Economics found
that only 24 percent of companies increased wages and salaries in
the July-September quarter. That's down from 43 percent in the
April-June quarter and the first drop after three straight
Yet the firms
still added jobs at a healthy pace, which usually pushes wages
higher as employers compete for workers. A measure of hiring in
the survey dipped in the third quarter but remained near a
three-year high. The figures suggest that the number of people out
of work remains high enough that companies aren't under any
pressure to raise pay.
one-third of respondents said they expect their companies will
boost wages in the October-December quarter, about the same
proportion as three months ago.
job gains this year, there were still 9.3 million people
unemployed in September, according to government data. That's up
from 7.6 million before the Great Recession. More than 7 million
Americans are working part-time but are looking for full-time
work, which gives employers an even larger pool of potential
employees to choose from.
The NABE surveyed
76 of its member economists in late September. The economists work
for companies or private trade associations.
Weaker sales and
profits may have also made companies reluctant to boost pay. Just
49 percent of respondents said their company's sales rose in the
third quarter, down from 57 percent in the second quarter and the
smallest proportion in a year.
Profits also were
squeezed, with 14 percent of firms reporting smaller profit
margins. That was the largest proportion to do so in a year.
other findings included:
were only modestly concerned about slower growth in Europe. Only 7
percent of firms said a slowdown there would have a significant
negative effect, while 44 percent said it would have a minor
negative effect. Forty-six percent said it would have no impact
and just 3 percent said it would have a minor positive effect.
Still, the survey was conducted before weak economic data from the
region caused sharp drops in U.S. stock markets in the past two
— More than
three-quarters of economists surveyed expect the Federal Reserve
will begin raising its benchmark short-term interest rate in the
second quarter of 2015. Still, 84 percent said a small increase in
rates in the short-term wouldn't hurt their businesses.
— Two-thirds of
the firms said they are having no difficulty filling their open
jobs, a good sign for hiring. Government data shows that job
openings are at the highest level in nearly 14 years. Some
economists worry that many of the unemployed don't have the skills
needed for the jobs that are available. But the NABE survey
suggests that companies are mostly able to fill their available
jobs. That's also probably a reason that wages increases are less
common. If companies were having more difficulty hiring workers,
they might offer higher salaries.