Americans' wages, salaries and other benefits rose 4.9 percent last year, failing to keep up with the 1990 rate of inflation, the government reports.
The Labor Department said the rise in the employment cost index, considered one of the best gauges of inflationary wage pressures, was lower than the 1989 increase of 5.0 percent.The government also reported that contracts settled through collective bargaining last year gave workers average annual wage increases of 3.2 percent over the life of the pacts.
The last time parties covered by those settlements negotiated, usually in 1987 or 1988, wage gains were smaller, averaging just 2.0 percent annually over the contract term, the Labor Department said.
Wages and salaries of private industry workers inched up 0.8 percent in the September-December period of 1990, after seasonal adjustment, for the lowest three-month change in more than two years, the government said.
While a moderate increase in employment costs is good news for American businesses, it means that worker pay and other compensation did not rise as fast as inflation, which shot up 6.1 percent last year.
However, private economists predict that eventually, workers probably will start to demand more to make up for the drain on their wallets brought on by sharp inflation.