Wages, supposedly, are headed upward

Wages among U.S. workers in general and the construction industry specifically are apparently going to start rising: which is what most economic models say they should be doing when demand for workers starts to outstrip supply.

“Wage growth is beginning to bubble up,” said Mark Zandi, chief economist at Moody’s Capital Markets Group to the Construction Labor Report. “It’s still nascent, early stages, but the labor market is now tightening to the point where we are beginning to see some stronger wage gains. This is the beginning of more definitive acceleration.”

Indeed, U.S. wage growth was at its strongest in the third quarter of 2014 since 2008. But in the U.S. construction industry, not so much. Bloomberg BNA reported in November that increases in first-year collectively construction contracts in the U.S. actually dropped from 2.8 percent in the first 11 months of 2013, to 2.6 percent during that same period this year. Those raises are even less significant factoring in the nation’s current 1.7 percent inflation rate.

Economists have been puzzled that the nation’s falling jobless rate – 5.8 percent in November 2014, down from 9.8 percent in November 2010 – has not brought about significantly higher wages. Adjusted for inflation, all U.S. wages have risen only 0.7 percent for the last five years. Part of the problems may be the continued drag of long-term jobless workers, who eventually disappear from government statistics, plus the widespread use of part-time workers.

As we have reported, the U.S. construction industry may be on the verge of a worker shortage – depending on location.

Next stop for RTW train: Wisconsin

On (to) Wisconsin.

Following the success that conservative lawmakers had in ushering through right-to-work laws in Michigan and Indiana in 2012, the Badger State seems to be the next Midwestern target for RTW proponents.

Like Michigan and Indiana, Wisconsin’s state government is dominated by Republicans, opening the door to passage of RTW. Wisconsin House Speaker Robin Vos (R) has suggested in the past that right-to-work-for-less would not be on the party’s agenda during the two-year legislative session beginning in January.  However, Wisconsin State Rep. Chris Kapenga pledged to bring up RTW next term, and Vos changed his tune.  In a statement released Dec. 1,  Vos said that “he looked forward to discussing the benefits of becoming a right-to-work state.”

Senate Majority Leader Scott Fitzgerald has not yet taken a clear stance on RTW, though earlier this month the We Party Patriots blog reported he said “he was open to the idea.” Gov. Scott Walker has said RTW “isn’t a priority,” which sounds very similar to the stance taken by Michigan Gov. Rick Snyder before he put his signature on our state’s law.

In 1993, as a freshmen assembly member, Walker co-sponsored right-to-work legislation.