Employment costs in the United States showed solid growth for two consecutive quarters last October-December (fourth quarter). With businesses competing for a limited labor supply, the rate of increase in labor costs in 2021 was the highest in 20 years for the whole year.
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Changes in the employment cost index (upper row is year-on-year, lower row is year-on-year)
U.S. Department of Labor
Rewards increased in a wide range of industries from October to December. Of the employment cost index, wages and salaries of non-military workers increased by 4.5% from the previous year. It recorded the highest rate of increase after 2001 when comparable data were published.
The continued steady growth of the index indicates that businesses have no choice but to raise wages to secure employees against the backdrop of tight labor supply and demand. In some cases it can put pressure on profits, but many companies are passing those costs on to consumers through price increases.
Wages and salaries in the private sector rose 1.2% quarter-on-quarter and 5.0% year-on-year.
See the table for details on statistics.
Original title:U.S. Employment Costs Climb in 2021 by Most in Two Decades(excerpt)
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