Corporate profits should lead to wage increases in 2011
U.S. workers should see wage gains this year, according to The Wall Street Journal.
A combination of saving money at the corporate level along with a surge in exports to fast-growing emerging markets could lead to average wage increases of as much as 3 percent in 2011, according to the Society for Human Resource Management, compared with 1.7 percent in 2010.
The rise in incomes would be enough to boost consumer spending, but not enough to cause concerns of an inflationary spiral.
In the past two years, productivity has risen at an average annual rate of about 4 percent, and corporate profits have increased more than 30 percent.
In January, the average U.S. hourly wage rose 0.4 percent, the largest one-month increase in more than two years.
“There are some green shoots in terms of wages,” said Torsten Slok, senior economist at Deutsche Bank in New York, in an interview with The Wall Street Journal. “Companies are starting to respond in a more traditional way and reward their workers.”
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