Workers' Pay, Not Just Benefits, Rises in Tight Labor Market

The Labor Department estimates that private-sector workers' average hourly compensation, including both pay and benefits, increased 2.9 percent from a year earlier in the third quarter, reports the Wall Street Journal . The yearly gain in base pay for U.S. workers was a slight increase from the prior quarter, led by a 3 percent increase in wages and salaries. It was the first period since mid-2016 that base pay rose at a faster rate than benefits. Another Labor Department measure of hourly wages climbed 3.1 percent in November from a year earlier, matching the best annual increase in nine years. The improvement in wages comes with the unemployment rate holding steady at 3.7 percent since September, the lowest point in 49 years. "It's about time that workers are being compensated. We've been waiting to see these base pay increases for the longest time," notes Robert Half's Paul McDonald. Benefit costs — including health coverage, retirement benefits, and paid leave — increased 2.7 percent from a year earlier in the quarter ended in September. The data suggests tax cut-related bonuses did not rise in the third quarter, while the share of compensation from nonproduction bonuses remained the same as in the third quarter from the previous two periods.