Most U.S. workers have been getting pay hikes that exceed the rate of inflation in recent months—but the average hides the outliers, and a growing share are seeing their wages frozen, data from the Federal Reserve Bank of Atlanta shows.
More than 12% of workers have not received a raise over the last 12 months, the most in more than two years, according to the Atlanta Fed’s Wage Growth Tracker, which measures the distribution of pay gains as well as the average. By one smoothed-out measure, the share of the workforce that’s experiencing a pay freeze is rising at the fastest pace since 2010.
The backdrop is a slowing rate of inflation, which is easing the pressure for pay to keep up with the cost of living. There’s now more optimism that the Fed can tame inflation without triggering a recession, which would be good news for workers because—along with job losses—wage freezes also became more prevalent in the last two economic downturns.
At the top end of the Atlanta Fed’s distribution, more than one-quarter of workers saw their pay increase by at least 16% in the 12 months through January.
Many of the outsize hikes are concentrated in high-demand professions like nursing, says Giacomo Santangelo, an economist at Monster, a service that connects people to available jobs. He sees a disparity in labor demand, which is increasingly focused on groups with specialized skills.
“Despite recent wage growth, this gap exacerbates the financial strain on workers and consumers.,” says Santangelo.
The Atlanta Fed’s wage data is based on measures of the nominal wage growth of the same individuals over a 12-month period.
This article was provided by Bloomberg News.