With unemployment rising and the available labor pool expanding, don’t expect a big raise to kick off 2010.
The average annual pay raise at year-end and at the start of 2010 likely will fall below 2 percent, according to BNA Inc. The legal and business publisher said the final second-quarter reading of its wage trend indicator was 98.55, down from 99.35 in the first quarter. The index, based on a reading of 100 for the 1976 second quarter, dropped for the fifth straight quarter.
It also was the index’s lowest reading since the second quarter of 2004, when the indicator was at 98.28.
BNA’s index compiles and calculates economic data that forecast what the private sector’s annual wage increases will be in the next six to nine months. The actual annual pay raises are calculated by the U.S. Department of Labor’s Employment Cost Index.
Federal statistics showed that the average annual wage increase in the first quarter was 2 percent, an all-time low since the government began tracking pay raises in 1980. The BNA index shows that it will likely fall below 2 percent in the coming months.
The Labor Department figures showed that the average annual wage increase in 2008 was 2.6 percent.
“Labor market conditions are extremely weak,” said economist Kathryn Kobe, who helped develop the index. “We’re in a much different employment situation than just a couple of years ago.”
