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Auto Suppliers Complain that They Can’t Get Good Help

Summary:
The business press routinely gives us stories of employers complaining about labor shortages. This Reuters piece on struggling auto suppliers is the latest example. The piece does tell us the suppliers have tried the one proven remedy for labor shortages, higher wages, but the data don’t support the claim. According to the graph in the article, the average hourly wage rose from .80 in January of 2019 to .20 in August. This amounts to a 5.2 percent increase over one and two-thirds years or a 3.1 percent annual rate. That is almost exactly the economy-wide average for the rate of wage growth in the pre-pandemic period. (It’s lower than the current rate.) In other words, auto suppliers are not raising wages especially rapidly, which is likely the reason they are having trouble getting

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The business press routinely gives us stories of employers complaining about labor shortages. This Reuters piece on struggling auto suppliers is the latest example.

The piece does tell us the suppliers have tried the one proven remedy for labor shortages, higher wages, but the data don’t support the claim. According to the graph in the article, the average hourly wage rose from $26.80 in January of 2019 to $28.20 in August. This amounts to a 5.2 percent increase over one and two-thirds years or a 3.1 percent annual rate. That is almost exactly the economy-wide average for the rate of wage growth in the pre-pandemic period. (It’s lower than the current rate.) In other words, auto suppliers are not raising wages especially rapidly, which is likely the reason they are having trouble getting workers.

The post Auto Suppliers Complain that They Can’t Get Good Help appeared first on Center for Economic and Policy Research.

Dean Baker
I am a senior economist at the Center for Economic and Policy Research (@ceprdc). I also run the blog Beat the Press (@beat_the_press)

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