That’s been reflected in the slow growth of productivity: Output per hour worked has risen at an annual average rate of 1.2 percent since the recession ended in June 2009, well below the 2.2 percent post World War II pace.
Companies may also be approaching the limits of how much of their operations they’re willing or able to outsource. “We’re probably in the third and maybe fourth cycle of outsourcing,” Quigley said. “Most of the large companies, if they were going to outsource, they’ve already done it.”
The combination of surprisingly robust demand for blue collar workers and their limited supply is forcing companies to increase pay at the bottom end of the scale. Minimum wage increases have also helped those less well-off.
That’s helping to reverse the decades-long trend toward greater wage inequality, according to Levanon, who co-wrote the report with economist Frank Steemers.
Besides granting bigger wage increases, companies are getting creative in offering other perks to employees, including more breaks, re-jigged work schedules and greater flexibility for working parents, Quigley said.
The improved packages look to be attracting more women into blue collar jobs. “It helps remove some of the inhibitions or reluctance” some women may have in taking those positions, Levanon said.
The increase in female participation is particularly evident in the transportation sector, where demand for workers has taken off because of the growth of online shopping. “It’s probably ground zero for labor shortages,” Levanon said.
“Lower income workers are doing better,” Moody’s Zandi said. “The balance of power has shifted from employers to employees.”
This article was provided by Bloomberg News.