With the labor market continuing to be super competitive, the baseline for hourly wages may be approaching $20 if companies want to attract badly needed talent, said one economist.
"I am starting to see a willingness to hit the $18 an hour mark. I am kind of looking at that more as maybe where companies start to come in on a regular basis," said Emsi Burning Glass chief economist Ron Hetrick on Yahoo Finance Live. "You had companies like Amazon who set the standard there. I think everybody else is catching up. We have seen fast-food settling into the $15 to $16 an hour range."
The latest reads on the jobs market underscore the upward pressure on worker wages.
U.S. employers added 431,000 jobs in March. The unemployment rate fell to 3.6% compared to 3.7% expected — the lowest since February 2020. Hourly wages rose a solid 5.6% in March, the Labor Department said.
Meanwhile, the Labor Department also reported this week that 4.4 million people quit their job in February as they sought out higher wages. Job quits surged by 74,000 in retail trade, 22,000 in durable goods manufacturing and 14,000 in state and local government education.
Retailer Target said recently it was lifting its minimum wage range to $15 to $24 an hour depending on what role a worker assumes.
Besides paying workers more from the get-go, employers are having to add other sweeteners to keep talent right now.
"You have got to keep it a fresh experience. You have to work through their career development. They want to know where they are going and if you can offer those opportunities to move around and continue learning and growing in your career, then you are going to keep those people for the most part. Wages certainly being a part of that," Paychex's CEO Marty Mucci said in a recent interview with Yahoo Finance Presents.
For its part, data compiled by the payrolls service company suggests that employers are ponying up more hourly cash as Emsi's Hetrick implies.
Hourly earnings rose for the 10th straight month, Paychex jobs data for March showed.
Added Mucci, "It is very important to employees that they have workplace flexibility, whether that's hybrid working and so forth, but also are they continuing to learn and grow. If you do that, I think you'll keep a lot more of them than sometimes we're seeing today."
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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