MNI REALITY CHECK PART 2: Pending Min Wage Increases Buoy Pay

--Workers More Willing To Job Hop

By Vicki Schmelzer

     NEW YORK (MNI) - Entry and mid-level wages nudged higher in December, with

pending minimum wage increases in many states serving to lift salaries at the

lower end of the staffing totem pole, according to recruiters interviewed for

MNI's latest REALITY CHECK on U.S. employment trends ahead of Friday's monthly

employment report.

--MINIMUM WAGES RISING

     In California, starting Jan. 1, 2018, the minimum wage for companies with

26 employees or more rose to $11.00 per hour from $10.50, the state of

Washington's minimum wage rose $0.50 to $11.50 as per January 1 and the minimum

wage in New York State increased to $10.40 from $9.70 effective Dec. 31, 2017.

     CNBC reports that "18 states and 19 cities, including the District of

Columbia, will boost the statutory minimum wage effective in January, giving

those workers a combined wage increase of more than $5 billion next year."

     This "rising tide" trend of minimum wage increases is serving to "lift all

boats" on the pay front, recruiters told MNI. 

     "If you are raising the minimum wage, it pushes everything a little bit

higher," said Preet Kuar, Executive Recruiter and Business Development Manager

at Pacific Staffing in Sacramento, CA.

     For example, a dispatcher position that used to pay $16 to $18 per hour,

now pays $18 to $20 per hour. Employers have become increasingly aware that you

get what you pay for, she explained. 

     "It's harder to find good, reliable candidates and not pay them about $17

to $20 per hour," Kuar said. 

--HIGH WAGES FOR GRADS

     The rising minimum wage and overall dearth of talent has benefited recent

college graduates, and those who completed their degree in December are "already

demanding quite high salaries compared to graduates from last year," she said.  

     Daniel Morgan, owner of two Express Employment Professionals franchises in

the Birmingham, AL area, noted that a year ago, the lowest salary generally

offered in the area was $10 per hour, which was already well above Alabama's

minimum wage of $7.25 per hour. 

     Back then, "you could get people to work for $10, but you really didn't

want to go below $10. Now, we seeing that people want even more than $10," he

said. 

     Employers already had difficulty coping with last year's minimum wages

increase and now, in many instances, must deal with yet another bump in worker

pay for 2018.  

     "We just had a minimum wage increase here and companies have really been

grappling with that," said Anne Woods, franchise owner at the Express office in

Covina/Santa Fe Springs, CA.

     Going forward, "I think that businesses are not going to be offering more.

What they'll hope is that the individual lower tax rate will help people to feel

like they are making more."

     Businesses remain uncertain about how the U.S. economy will fare in 2018,

especially the second half. "They're very cautious about giving any further

increases that they may not be able to support in a year," Woods said. 

--JOB HOPPERS

     "Now that the economy is doing so well, you have people that are either

looking for a better opportunity or now they're working for that company where

they really don't like the company or they don't like their boss and they know

now it is easier to find a job,"  Express's Morgan told MNI. 

     "More people are looking because they don't want to miss out on something,"

he said. 

     Job hopping has become much more common in the past year, with two key

factors driving the trend.

     "One is that the younger two generations are just more inclined to job hop

anyway. So, a GenXer and a Millennial will think nothing of leaving a company

after 12-18 months," said Express's Woods.  

     The other reason is that workers are willing to leave a company for a 5% or

10% pay raise, "and that's not that hard to get," she said. 

     "There are so many jobs on the market and it's so easy to find a new job.

One of our biggest educational campaigns with our clients is how to retain their

employees," Woods said. 

     More recently, Pacific Staffing's Kuar has had to coach job seekers on

realistic pay and work expectations. 

     She asks them, "What value are you going to bring? And are you going to

meet expectations?" 

     On compensation, "You can not make six figures and expect to work eight

hours and not be able to put your own time into your self-education," Kuar

warned. 

     Editor's Note: Reality Check stories report on topics of interest in the

U.S. economy. They are intended to complement and anticipate economic data. If

you are currently an MNI subscriber and want to be on the Reality Check

email-distribution list, contact sales@marketnews.com

--MNI New York Bureau; tel: +1 212-669-6438; email: vicki.schmelzer@marketnews.com

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