- Executives at various companies are confirming that there's pressure to raise wages.
- Wage growth has been sluggish since the recession, but is finally on the rise.
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Companies across America say they're under intense pressure to pay workers more
Wage growth has been sluggish since the recession, but is finally on the rise.
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There's no two ways about it: Corporate America is under pressure to pay workers more.
That's the impression that several executives gave during quarterly conference calls with analysts about their earnings.
The talk about higher wages came even before President Donald Trump signed the Tax Cuts and Jobs Act, which put more in the pockets of service workers across industries, from cashiers to cooks.
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According to executives, pressure to raise wages came from all sides. Several states raised their minimum wages, necessitating action. In other instances, tight labor markets made it more expensive to hire skilled workers and retain the best talent.
This means that nine years after the financial crisis, the lowest-paid workers may finally start to see their paychecks increase. And the official data backs up these anecdotes: Wages have been rising faster for lower-paid workers. And in January, average hourly earnings rose year-on-year at the fastest pace since 2009.
The comments from executives also illustrate why wage growth has recently taken on more importance for Wall Street and policymakers in Washington.
As people earn more and their demand for goods and services increases, they could drive an increase in inflation. Like wage growth, a pickup in inflation has eluded the US economy since the recession, and it has fallen shy of the Federal Reserve's 2% target.
Should inflation accelerate, the Fed may raise interest rates to prevent the economy from overheating. The risk here is that a policy misstep could end up hurting the economy.
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Here's just a sampling of what some companies said during fourth-quarter earnings calls (transcripts are via Seeking Alpha):
Kroger CEO Rodney McMullen: "
Burlington Stores CEO Thomas Kingsbury: "W
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