Reprinted from The Wall Street Journal by Harriet Torry on July 31, 2018.
US workers received their biggest pay raises in nearly a decade this year, a sign the strong labor market is boosting wages as employers compete for scarcer workers.
The Labor Department’s employment-cost index rose 2.8% in the year to June compared with a year earlier, the government said Tuesday. Wages and salaries, which account for about 70% of all employment costs, also rose 2.8% from a year earlier, the strongest gain for both measures since September 2008.
Since the end of the most recent recession, US unemployment has fallen to 4% in June from nearly 10% nine years earlier. Wage growth, stubbornly sluggish for years following the 2007-2009 downturn, has picked up as the labor market has tightened and employers have raised pay to attract and retain workers. …