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Lingering high unemployment rates, falling prices, and a slowed inflation rate will hobble growth in U.S. incomes to its slowest pace in history, according to the Conference Board’s Labor Market Institute.
In April, 40 percent of companies responding to a Conference Board survey had deferred bonuses and raises or were planning to do so by this month. Also in April, only 1.4 percent of workers left their jobs voluntarily.
“At a time when many strong candidates are knocking on employers’ doors and the risk of losing existing workers is minimal, companies can afford to cut wages and still maintain a highly qualified workforce,” said Gad Levanon, the institute’s director.
As a result, wages are more likely to grow more slowly than they did in the depths of the Great Recession, Levanon predicted.
Skilled jobs, particularly those in technology, will remain strongest, while wages for jobs dependent on customer contact – restaurants, hotels, and retail, for example – will be soft.
Because low-skilled customer-contact jobs are most often held by women and minorities, those groups will suffer most as wages stagnate, the report noted.
The monthly jobs report from the U.S. Bureau of Labor Statistics will mask this trend, the CB points out. The federal report focuses on “average hourly earnings,” which can rise even as masses of low-wage workers are losing their jobs.
“More dependable gauges, such as the Employment Cost Index, will soon show a significant slowdown in wage growth,” the CB said.
TREND FORECAST: More than a slowdown in wage growth, we forecast a decline in wage growth long term when inflation escalates and the value of currencies decline.

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