retail news in context, analysis with attitude

Bloomberg has a piece saying that when Walmart announced increased wages for some 500,000 employees last month, it was less altruism and more a response to a specific economic trend.

"Yesterday's Beige Book (an anecdotal roundup of economic trends across the various Federal Reserve districts) gave us a clue about what's really going on," the story says. "The report notes that contacts in several regions of the country noted that employers are starting to have trouble attracting and keeping workers, and have been forced to raise their wages as a result."

The piece goes on: "Wage pressures were moderate across most Districts, but some contacts reported increased wages to attract skilled workers for difficult-to-fill positions. In particular, service sector firms in the New York District noted increasingly widespread reports of wage hikes. Contacts in the Cleveland, Richmond, and Kansas City Districts noted increased wage pressure due to the difficulty in attracting and retaining truck drivers. A staffing firm in the Chicago District reported some companies were also willing to raise rates for unskilled workers to reduce turnover, and contacts in the Atlanta District noted increasing entry-level wages."

The bottom line, Bloomberg says, is that "as the economy gathers steam, workers have more options and that's forcing employers to pay more."
KC's View:
Talk about déjà vu all over again...

It was just last week that MarketWatch had a similar story, and MNB dutifully reported on the trend.

I mention it again here because after the first story ran, I got an email from an MNB user who seemed to view the MarketWatch story as political propaganda, writing, in part:

MarketWatch needs to wake up and the Federal government needs to publish a realistic truthful number. The official unemployment numbers are extremely misleading.

Anyone who thinks that the unemployment rate is around 5.6% also needs to wake up. I hate to burst MarketWatch’s bubble but the real reason(s) driving the economy are low interest rates and stock market gains.

The truth is that about 100 Million Americans are not working.

I actually don't know anyone who thinks the actual unemployment rate is 5.6 percent. But I'm not sure that the ideas that actual unemployment is higher and that wages are going up because of a tightening labor market are mutually exclusive.

A lot of it depends on where you live. North Dakota has a 2.8 percent unemployment rate, Nebraska is at 2.9 percent. South Dakota is at 3.3 percent. I've talked to retailers in such places who say that, in fact, good help is hard to find.

The economy can and should be a lot better than it is. But it is getting better, and we're moving - slowly, to be sure - to the point where it is going to be a seller's market, not a buyer's market.