WASHINGTON (AP) — Workers saw their wages and benefits rise slightly faster in 2010 than 2009, but the gain was still the second-lowest increase in nearly three decades.
Wages and benefits increased 2% last year after a 1.4% increase in 2009, the Labor Department reported Friday. Both years were the smallest gains on Labor Department records that go back 28 years.
The modest gains reflect a severe recession which pushed millions out of work and depressed the bargaining power of those with jobs. While weak wage gains mean low inflationary pressures, it also leaves households with less income to boost consumer spending.
Analysts believe labor costs will be constrained as long as unemployment remains elevated. The unemployment rate in December stood at 9.4%. Many economists believe it will still be around 9% a year from now.
The Labor Department's Employment Cost Index measures wages, salaries and benefits — which include health insurance and pensions.
Wages and salaries rose 1.6% in 2010. That's a slight improvement from 2009's 1.5% — the lowest annual gain on record.
