WASHINGTON , Wages and salaries jumped by the largest amount in the last three months of September according to records dating back to 20 years. This is because companies are required to pay higher wages to fill a record number of jobs.
According to Friday , pay rose 1.5% in the third quarter according to the Labor Department. This is a sharp increase from the 0.9% recorded in the previous quarter. The July-September quarter saw a 0.9% increase in benefits, which was more than twice the amount recorded in the three preceding months.
This data also shows the increasing leverage workers have in the job market this past year. They are receiving higher wages, more benefits and other perks such as flexible working hours. According to government data, there are more jobs than unemployed people so businesses have had to work harder in order to hire staff.
While wage increases are being eroded by higher inflation, overall wages are still rising with the price rises. Economists stated that the 1.5% increase in wages is more than the 1.2% inflation increase during the same period.
It's still a better result than a year ago. The record-breaking increase in wages and salaries was also recorded in the September year. The government reported Friday that prices rose 4.4% in September compared to a year earlier. Inflation was 3.6% last year, excluding volatile food and energy categories.
Millions of Americans are reacting to rising wages by leaving their jobs to seek better-paying positions. A record 3% of American workers left their jobs in August. Companies must also raise wages to retain their workers because of the higher rate of quitting.
The highest income gains for workers who change jobs in recent decades are being experienced by those who do. According to the Federal Reserve Bank of Atlanta in September, job-switchers saw a 5.4% increase in their salaries compared to a year ago. This is an increase of 3.4% compared to May's and the largest increase in almost 20 years. Pay rose 3.5% for those who kept their jobs.
Restaurants, bars, and retail workers with lower incomes are experiencing the greatest income gains. However, wage increases are expanding. Oxford Economics reports that 40% of workers have received a 0.5% monthly increase in their pay for six months, up from 9% prior to the pandemic.