The ongoing economic expansion is lifting the fortunes of a growing number of segments, including the U.S. apartment market, state and local government spending and tourism. Complete recovery continues to elude a number of other segments, however, including the single family housing market. Significant wage growth remains another major missing piece.
According to writer David Leonhardt, the average hourly wage of all private sector workers, adjusted for inflation, is still just twenty-two cents, or less than one percent above where it was in January 2009. There are reasons to believe that meaningful wage growth will soon be part of our future. As an example of what’s to come, Walmart, the nation’s largest private employer, recently announced that it would increase wages for half a million of its workers, including many of its lowest paid.
The company announced that it would spend about a billion dollars per annum to raise the pay of all of its employees to at least nine dollars per hour by April and to at least ten dollars per hour by next February. Importantly, average inflation-adjusted hourly wage for private sector workers has risen more rapidly over the past year than at any time since 2009.
