Bloomberg is one of my favorite sources to learn about the economy and how it affects workers. Dan Moss, Bloomberg’s Executive Editor for Economy, has a short article on a good measure to understand how to gauge changes in hourly earnings. The Employment Cost Index (ECI) is a quarterly report from the Bureau of Labor Statistics. According to Moss, it “looks at how much employers are compensating the same position over a period of time. In other words, what is the pay of a builder, or plumber, or, God forbid, a journalist for a job over a period of time.” He says the number to watch is 2%, which is where the index has been stuck for a long time. Moss cites a forecast by Morgan Stanley that says the index will move to 2.6%, which he calls “encouraging.” I hope this is good news. In any case, it is good to have another tool to analyze what we are earning.
P.S. USA Today reported the latest ECI data, and the news was ugly. The second quarter increase was only 0.2%, "the slowest pace on record dating to the early 1980s." The article goes on to discuss how this lack of growth is odd given drops in unemployment. Employers should have to pay more to hire new employees and keep existing employees in a tight labor market. I will keep watching this topic and follow up with other news and views about how our very strange economy affects workers.