American companies are facing widespread labor shortages, and this will put them under pressure to raise wages and benefits in 1989 to keep and attract good people, the Conference Board said in a report released Monday.
The board, a private research group, predicted private industry wage and salary costs will rise by 5 percent in 1989, up from 3.7 percent in 1988 to September.Overall prices in the United States are expected to climb by about 5 percent in 1989, up from the current level of 4.2 percent.
"Six full years of economic recovery have produced the tightest labor market in decades," said Audrey Freedman, the board's management counselor.
"Business seems to have reached the edge of the population's capacity to produce addtional trained workers," Freedman said. "Employers are staffing their operations with greater difficulty and at a rising cost."
The group said that a current shortage in such areas as Boston, Atlanta, Los Angeles and northern New Jersey is already spreading to areas such as Greensboro, N.C., and Richmond, Va.
The Conference Board based its report on the work of its 1989 Human Resources Outlook Panel composed of 10 prominent business and economic leaders.
The panel found that labor shortages were concentrated in the largest urban centers and stressed its concern about the rising number of Americans who are both unable to work and unavailable for job training.
The panel said many highly skilled jobs are going begging in the United States and that shortages are particularly acute in service industries such as health care.
Some of the most severe labor shortages are in lower-paid, entry-level jobs, heavily staffed by 16- to 24-year-olds with no formal training or experience. The Board said this group has declined as a proportion of the population, while the economy has created 10 million new jobs in the past 10 years.
Panel member Irving Margol, an executive vice president of Security Pacific National Bank in Los Angeles, said it was so difficult to fill secretarial and clerical positions that "stealing efficient secretaries occurs not only between companies but also within companies."
The report also noted a shortage of industrial workers with traditional factory skills, including machinists and tool and die makers.
The board said U.S. firms are likely to respond to these shortages by increasing productivity and that larger companies will be in a better position to play technological "catch up" than smaller firms.