Will your pay improve next year? See what experts say about the outlook for wages


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The government’s employment report for October showed a better-than-expected jump in Americans’ pay. Average hourly earnings grew by 10 cents during the month to $25.92, which is up 2.8 percent from a year earlier.

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As part of our 4th quarter 2016 Bankrate Economic Indicator survey of leading economists, we asked:

Are wages likely to show more of that kind of improvement over the course of the next year?

Scott Anderson

“Yes. Full employment and rising inflation will lead to a period of stronger wage growth than we have yet seen in this expansion, in my opinion.”

— Scott Anderson, chief economist, Bank of the West

Scott Brown

“Yes. Wage growth has been trending higher, which is what one would expect as the job market tightens.”

— Scott Brown, chief economist, Raymond James

Nariman Behravesh

“No. Inflation expectations, which have changed little, drive wage inflation.”

— Nariman Behravesh, chief economist, IHS Markit

Gregory Daco

“Yes. In a maturing labor market job gains will slow, but reduced slack will provide employees with greater bargaining power.”

— Gregory Daco, chief U.S. economist, Oxford Economics

Robert Dietz

“Yes. With a low unemployment rate and continuing reductions in marginally attached and involuntary part-time workers, the pace of wage gains should accelerate. During earlier expansions, tight labor conditions resulted in wage gains in the 3-4 percent range.”

— Robert Dietz, chief economist, National Association of Home Builders

Bill Dunkelberg

“Yes. Labor markets are very tight in construction and manufacturing, (meaning) gains there.”

— Bill Dunkelberg, chief economist, National Federation of Independent Business

Seth Harris

“Yes. Labor markets are tight. If unemployment remains low, and particularly if Congress invests in a massive infrastructure spending program, then it is reasonable to expect tightness to continue. On the other hand, there have been important changes in the ways in which wages are set. As those changes spread more broadly through the economy, we will continue to see downward pressure on many workers’ wages.”

— Seth Harris, counsel, Dentons; and executive-in-residence, Cornell Institute for Public Affairs

Timothy Hopper

“Yes. The economy is pushing through full employment, and labor demand is holding up. This implies that wages will continue to rise.”

— Timothy Hopper, chief economist, TIAA

Robert Hughes

“Yes. Continued demand for labor, supported by real economic growth amid a low unemployment rate, is likely to lead to accelerating wages gains.”

— Robert Hughes, senior research fellow, American Institute for Economic Research

Hugh Johnson

“Yes. I would doubt that the increases will be as significant as is suggested. I would be inclined to conclude that average hourly earnings will increase at a rate between 2.5 percent and 3.0 percent for each month through 2017.”

— Hugh Johnson, chairman and chief investment officer, Hugh Johnson Advisors

Alan MacEachin

“Labor is already in low supply in many areas, particularly skilled labor. The incoming administration’s plans for a significant pickup in infrastructure investment would only add to wage pressures for construction workers, who are already in demand by the homebuilding industry. What’s more, possible immigration restrictions would further restrict the labor supply. It appears that it could be developing into the best sellers’ market for labor in years.”

— Alan MacEachin, corporate economist, Navy Federal Credit Union

Daniil Manaenkov

“Yes. A tighter labor market is continuing to put upward pressure on wages.”

— Daniil Manaenkov, assistant research scientist, University of Michigan Research Seminar in Quantitative Economics

David Nice

“Yes. Ongoing roll-out of increases to minimum wages at the state and local levels will bolster wage growth for lower-wage jobs, and continuing improvement to the composition of job gains will help as well.”

— David Nice, senior economist, DS Economics

Lindsey Piegza

“Yes. (We’ll see) minimal wage growth — (there’s) still ample slack in the labor market, with employers still hesitant to invest in employees.”

— Lindsey Piegza, chief economist, Stifel

Lynn Reaser

“Yes. The continued movement toward full employment and improvements in labor productivity could both drive and justify larger wage gains.”

— Lynn Reaser, chief economist, Fermanian Business & Economic Institute, Point Loma Nazarene University

John Silvia

“Yes. (We’re) already near full employment, and anticipated stronger demand should help underpin hiring and wage growth.”

— John Silvia, chief economist, Wells Fargo

Sean Snaith

“Yes. A faster pace of economic growth will accelerate wage growth in the upcoming year.”

— Sean Snaith, director, Institute for Economic Competitiveness, University of Central Florida

Lawrence Yun

“Yes, (because of a) tightening labor market.” “

— Lawrence Yun, chief economist, National Association of Realtors

Mark Zandi

“Yes. The labor market is near full employment and is set to become substantially tighter over the next year.” “

— Mark Zandi, chief economist, Moody’s Analytics