10/17/2021

Workers’ Pay Rises at Fastest Rate in a Decade

Compensation for U.S. workers grew at an accelerating rate in the third quarter, a sign a historically tight labor market is yielding better pay for employees.

The employment-cost index, a measure of wages and benefits for civilian workers, rose a seasonally adjusted 0.8% in July through September, the Labor Department said Wednesday. The gain was an increase from the second quarter’s 0.6% advance and matched expectations of economists surveyed by The Wall Street Journal.

Wages and salaries rose 0.9%, and benefit costs—which include health coverage, retirement benefits and paid leave—advanced 0.4%.

From a year earlier, compensation increased 2.8% in the third quarter.

The increase was led by improving pay for private-sector workers. Wages and salaries, which account for about 70% of total compensation, rose 3.1% from a year earlier for private-sector workers. That was the strongest year-over-year gain since the second quarter of 2008.

. . . Worker compensation is now rising at a faster pace than prices. The consumer-price index rose 2.3% from a year earlier in September, the Labor Department said.

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