Low-Wage Workers No Longer Getting Big Raises

The surge in wage gains for America's lowest-paid workers that defined the pandemic era appears to be running out of steam, reports the Wall Street Journal. The story uses stats from the latest jobs report to illustrate the trend:

• Average earnings for leisure and hospitality workers—among the lowest-paid sectors—were up 3.5% in July from the previous year, to $22.83 an hour. But average earnings for workers in the information sector were up 5.4%, to $52.61.
• The dynamic had been flipped amid the pandemic. In December 2021, wages in the leisure and hospitality fields were up 14%—businesses were desperate to hire as they reopened, giving those workers leverage—while those in the information sector were up less than 2%.

What changed? A cooling job market is part of the story. The unemployment rate, which hit a historic low in early 2023, has ticked up, and businesses—while not laying off en masse—are cautious about hiring. That's especially tough for lower-wage workers, who often rely on job-hopping to secure pay raises but are now finding fewer opportunities. Overall, average hourly earnings for all private nonfarm workers rose 3.9% over the past year, according to the jobs report, per NerdWallet. That's still above inflation growth, "which means consumers are more likely to remain resilient in the face of price increases—that is, unless there are price shocks."