Wages Are Growing 2.3%, but Your Paycheck Probably Isn’t

Wall Street Journal (12/04/15) Eric Morath
Average hourly earnings advanced 2.3% in November from a year earlier, according to the U.S. Department of Labor. That pace has roughly been maintained over the past two years. The trend of steady wage gains has coincided with the addition of an average of 234,000 jobs per month since November 2013, marking a clear acceleration in the expansion of the economy compared with earlier numbers.
However, the wage improvements were not spread evenly across industries. Middle-class jobs, such as those in manufacturing, transportation, education, and health services, are growing at a substandard pace, while wage gains at the high and low ends of the spectrum are growing much faster. The strongest wage gains have occurred in utilities, up 7.7% over the past two years. Wage gains in information are up 6.5% over two years, reflecting a strong demand for technology-focused workers. Wages in the leisure and hospitality sectors—mainly restaurant workers—also are up 6.5%. Retail wages are up 5.6%, reflecting both a tightening on the low end of the labor market and minimum-wage increases put in place in many states. Manufacturing wages are up 3.7% over two years, while in the transportation and warehousing sector wages are up 1.5%.

An Extra Pay Date for 2016—and Maybe 2015

Society for Human Resource Management (12/07/15) Stephen Miller
With February having 29 days next year, some employers will have 53 weekly or 27 biweekly paydays, instead of 52 or 26, respectively. Payroll departments must plan ahead for the fact that the leap day falls on a Monday, and they must also be aware that “in 2016, Jan. 1 falls on a Friday, so if the employer pays biweekly, the issue of 27 payroll dates may occur in 2015 or 2016, depending on how the employer addresses this issue,” says Staci Ketay Rotman, a partner in the Chicago office of law firm Franczek Radelet. “With a payroll leap year, the effect on employees depends on which day of the week the year begins and ends on.”
Employers forced to decide whether to issue a “bonus” last paycheck in 2015 or address the extra pay period in 2016 must ensure they maintain compliance with offer letters, contracts, or other documents containing compensation information, and if they opt to reduce pay to even out over the 27 weeks, they must consider the U.S. Department of Labor’s wage threshold for overtime exemptions. Moreover, experts say employers will have to contend with morale issues if adding an extra paycheck reduces the amount of each paycheck.

The Conference Board Employment Trends Index Decreased in November

Conference Board News Release (12/07/15)
The Conference Board Employment Trends Index decreased in November. The index now stands at 128.69, down from 129.75 in October. The change represents a 2.7% gain in the ETI compared with a year ago.
“Despite the strong numbers on job creation in the past few months, the [ETI] posted the largest one month decline since the Great Recession, with five of the eight components contributing negatively to the index,” says Gad Levanon, managing director of macroeconomic and labor market research at the Conference Board. “While two of the components—initial claims for unemployment and our forecast of job openings—suggest modest adverse developments, their levels are still healthy. However, the past month’s weakness in consumer confidence in job growth and the slowdown in temporary help needs careful watching.”