Wage increases are the highest on record, business economists say

More firms report raising wages and salaries than at any time in 36 years, according to a survey of business economists out Monday.
A net 56% of respondents to the third-quarter National Association for Business Economics survey said their firms were raising wages, and no respondents said they expect wages to decrease over the coming quarter. 
Firms may be coming to terms with an argument that many economists have been making for years: higher wages are critical for attracting workers. In the Q3 survey, fewer firms reported hiring without difficulty. Among those firms struggling to hire, 37% said they’re trying to address the gap by raising wages, 35% are training existing workers and 23% are “investing in labor-saving processes” such as improved technology and other productivity boosts.
Nearly every other metric surveyed by NABE was also up, including sales. A net 55% of respondents, the highest since October 1994, said sales were rising.
But another vital item is up: the share of firms reporting hiking prices. The net 37% of respondents who said they were raising prices was the highest since early 2006.
Respondents were asked if their firms adjusted plans for hiring or investment as a result of the Trump administration’s 2017 tax cuts. A majority, at 81% in fact, said the tax and jobs act had not prompted a change in plans.
That may shed more light on the dismal showing of business investment, which grew at only a 0.8% annual rate, according to the third-quarter GDP report released Friday.
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