Wage hikes are expected this year, study finds, but other prices may go up too
MADISON, Wis. (WMTV) - In response to a worker shortage, employers are planning to step up their wages, according to a survey released this week by the Wisconsin Manufacturers & Commerce.
After surveying more than 250 businesses of different sizes across the state, the WMC said at least eight in ten companies are planning to raise wages by 3 percent or more this year.
“This is the fastest that we have seen wages go up in recent memory, and it’s a testament to the fact that businesses are really struggling to hire right now,” Nick Novak, WMC spokesperson, said.
Novak said the pay bumps also reflect competition among employers.
“They are desperate for workers, and in some cases need to steal them away from other employers who are right down the street,” he said.
At Smart Motors, a Toyota dealership in Madison, HR Director Peter Graper said entry level jobs start at around $15 per hour, about $3 higher than what the wages were for the last decade.
“It’s hard to deny that when the market changed we had to change along with it, or we didn’t get applicants,” Graper said. “Moving our entry level wage up simply got us more applicants.”
While the wages are higher than before, Graper added his offers may not be enough.
“Maybe it was OK six months ago, but with prices increasing on everything, we may need to go higher. We see that as an evolution of wages, but that also means our prices increase, so it’s a two-edged sword,” he said.
According to Noah Williams, economics professor at UW-Madison, policymakers are fearing a “wage-price spiral.” Williams explained, if wages go up due to labor shortages or because workers are demanding more to keep up with increasing prices, the result could be more inflation.
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