CNH Industrial’s situation shows why hourly earnings are likely to keep picking up after surpassing 3 percent for the first time in this expansion, according to recently released figures. A Labor Department report Tuesday showed U.S. job openings fell in September though remained near a record, exceeding the number of unemployed people by 1 million. While employers hope to retain and attract workers with better benefits such as extra vacation days, money may be talking louder now.
“We’ve seen a tight labor market for a while, but it seemed like employers were doing everything they possibly could besides raising wages,” said Sarah House, senior economist at Wells Fargo. “It seems that hasn’t been enough. They’re starting to realize, ‘Hey, we just need to pay up a little bit more.’ ”
CNH Industrial, based in the U.K., is in particular need of skilled candidates: Each tractor is highly customized, and the tools often require advanced training and experience. Aside from wages, they’re still buttering up employees with perks: The Racine plant’s human resources manager, Susan Prey-Fobes, said she and her colleagues recently grilled 600 burgers to feed workers for lunch.
Making employees feel valued is “as much a part of this frenzy on recruiting as anything else,” she said by phone.
Another local challenge comes from Foxconn Technology Group, the Taiwanese iPhone assembler that’s building its first major U.S. facility near Racine. The Wall Street Journal reported Foxconn is considering bringing in Chinese engineers to help staff the plant because it’s proving difficult to find workers in the U.S.
At the same time, corporations face uncertainty over how to invest amid the trade war with China. And firms frequently are putting tax cuts toward things other than hourly wages, such as one-time bonuses and stock buybacks.
“It’s not like we’re thinking there’s a surge in wage growth coming and that this is a massive inflationary story – we’re just saying that the direction of travel does seem up,” said Michael Gapen, chief U.S. economist at Barclays. “Wages are firming, and that’s the right view. They’re just doing so modestly.”
Subscribe to the Coronavirus newsletter
Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.