By David Pendered
A tight labor market remains a big story in metro Atlanta and the Southeastern United States, and the latest economic survey by the Federal Reserves shows employers remain resistant to raising wages to attract workers.
The survey said employers are offering a wide array of alternatives to raising wages. Even when the incentives don’t work, employers are willing to wait as long as possible to raise wages, often waiting until they had to offer significant increases:
- “In cases where wage pressures were described as ‘acute,’ if firms were still not able to meet demand with their existing labor supply after implementing nonwage benefits, they typically raised wages, often considerably.”
When wages have been raised, the annual increases have been in the rage of 2 to 4 percent, according to the report.
As has been noticed in a string of recent Fed reports, employers continue to rely on a host of non-wage incentives to attract and retain workers. The incentives include longer vacation periods, flexible scheduling and marketing a positive corporate culture to existing and potential workers, according to the report.
These findings about wage pressure are described in the most recent edition of the Beige Book, released May 30. The findings are consistent with recent remarks by Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta.
In a May 21 presentation to the Atlanta Economics Club, Bostic delivered a speech that observed:
- “Despite the dramatic improvement in the employment picture, overall wage growth remains tepid compared with previous expansions. That said, we have seen evidence of increasing wages along some dimensions consistent with improvement in labor utilization rates. For instance, if you look at the typical wage growth experience of individual workers, as the Atlanta Fed’s Wage Growth Tracker does, it shows that the premium for workers who change jobs is at a cyclical high.
- “My staff spends a lot of time canvassing businesses in the Sixth District to assess whether the facts on the ground seem consistent with our read of things based on the official statistics. Feedback suggests, as the data show, that labor market conditions have tightened, though I wouldn’t characterize the situation as overheated. This all leads me to conclude that the economy is close to or at ‘maximum employment’ but not yet significantly beyond that point.”
The picture is much the same across the nation, according to the Beige Book. The report observed that “many firms responded to talent shortages by increasing wages as wells as the generosity of their compensation packages.”
The observation concluded: “In the aggregate, however, wage increases remained modest in most [Fed] Districts.”
The Atlanta Fed District encompasses Alabama, Florida and Georgia, and portions of Louisiana, Mississippi and Tennessee.
Survey results from this region show the market is extremely tight for workers in a range of fields: hospitality workers, long-haul drivers, technicians, skilled craft laborers, distribution workers, nurses and other medical staff, and information technology professionals, according to the report.
The report did not make a causal connection between stagnant wages and workers who were not willing to move to take a job. The language seems to stop just short of making that connection:
- “[G]eographic mobility was a major challenge, as workers’ willingness to relocate for a position remained more challenging than in the past.”