The latest survey data from the National Federation of Independent Business continues to point to rising wages for American workers.
The November NFIB report showed that 23% of firms reported an increase in compensation, up two points from October and near an expansion high.
This number has been trending upward since the financial crisis.
Moreover, a seasonally-adjusted net 20% of small businesses plan to raise compensation in the coming months, 3 points up from October, and “historically strong for this recovery,” according to the report.
This number, too, has been trending higher over the last few years.
In the wake of the financial crisis, sales was by far the single most important concern for small businesses, but that has seen a huge drop in the last couple of years with the economy improving. Now, there is a larger percentage of firms whose single most important problem is “labour quality” than those whose biggest problem is “sales.”
And that’s important as the change toward labour quality becoming the most important problem for more employers suggests that economic concerns are shifting from weak demand to tight supply.
In fact, 47% of respondents reported “few or no qualified applications” for the positions they were trying to fill. This number that has hovered in the mid-to-upper 40’s since May 2014, and has been trending higher since 2009.
Taken together, these factors suggest that American workers should be seeing higher wages soon.