The latest survey data from the National Federation of Independent Business pointsto rising wages for American workers.
The September NFIB report showed that 23% of firms reported increase to compensation in the past three months, unchanged from the last two months. This number has been trending upward since the financial crisis.
Furthermore, a seasonally-adjusted net 16% plan to raise compensation in the coming months. That’s a solid 3% higher from August’s report, and “still historically strong for this recovery,” according to the report. This number, too, has been trending higher over the last few years.
In the wake of the financial crisis, sales was by far the single most important concern for small businesses, but that has seen a huge drop in the last couple of years with the economy improving. Notably, there is a larger percentage of firms whose single most important problem is “labor quality” than the percentage of firms whose biggest problem is “sales.”
And, the percentage of firms who selected “labor quality” as their biggest problem hasn’t been this high since 2007. That’simportant as the change toward labor quality becoming the most important problem for more employers suggests that economic concerns are shifting from weak demand to tight supply.
In fact, 45% of respondents reported “few or no qualified applications” for the positions they were trying to fill. Although this is slightly down from August’s 48%, this number that has hovered in the mid-to-upper 40’s since May 2014, and has been trending higher since 2009.
And all together, these factors suggest that American workers should soon see higher wages.