Under Trump Bigger Pay Increases for Lower-Paid Employees

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Short supply of labor, minimum-wage rises and increased poaching have helped lift wages for lower-income workers writes Eric Morath and Jeffrey Sparshott of the WSJ (abridged):

Bigger Rank-and-file workers are getting bigger raises this year—at least in percentage terms—than bosses.

Wages for the typical worker—nonsupervisory employees who account for 82% of the workforce—are rising at the fastest rate in more than a decade, a sign that the labor market has tightened sufficiently to convey bigger pay increases to lower-paid employees.

Gains for those workers have accelerated much of this year, a time when the unemployment rate fell to a half-century low. A short supply of workers, increased poaching and minimum-wage increases have helped those nearer to the bottom of the pay scale.

The Atlanta Fed found wages for low-skilled workers have accelerated since early 2018, and last month matched the pace of high-skill workers for the first time since 2010.

Higher-paid workers are more likely to have access to perks, including retirement contributions, vacation leave and subsidized childcare—benefits in addition to pay that can keep workers from changing jobs. Many lower-paying jobs at retailers and restaurants don’t offer such perks, and workers may jump between those jobs for a few quarters an hour.