Since the 2009 recession, wages in the United States have been essentially flat. As the economy improves and employment increases, we are hearing many clients speak of the difficulty in hiring skilled employees. In past economic cycles, this has led to increasing wages. The Economists’ article, “Looking for a Rise” contains important information on this trend.
In an environment where your prices and productivity can increase along with wages, paying workers more is normally considered a positive outcome of an improving economy. However, we are hearing and reading of conditions that make it difficult to sustain, let alone raise prices. And as stated in the article, productivity is not following wages.
Being trapped between rising wages and flat or falling prices may represent a considerable an uninsurable risk to your company.
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