Where is the money?

Wages are not keeping up with strong economic growth

The U.S. economy has been booming of late, and at press time, the unemployment rate was hovering around 3.9 percent, its lowest level since the early 2000s. Yet wages in three industries—construction, long-haul trucking and child care—remain lower than expected despite widespread worker shortages, according to Bloomberg Law.

Bloomberg Law looked closely at the construction market in Atlanta where there is a current backlog of work caused by a worker shortage. The Construction Education Foundation of Georgia has trained 250 workers annually at no charge to fill entry-level positions, and staffing company PeopleReady has been recruiting out-of-state workers with food and hotel stipends. Although these efforts have helped offset the labor shortage, Bloomberg Law says construction employers have kept annual wage increases at 3 percent to track with inflation.

Employers are saying Atlanta's average construction pay of $15 per hour prohibits them from increasing wages, which, they say, would draw unskilled workers instead of skilled technicians and may end up elevating home prices, for example. And the fact that contracting companies already are running thin margins makes higher wages a near impossibility.

Economists cite decreases in union negotiating power as another reason why wages are not rising as quickly as would have been anticipated.