Arab Press

بالشعب و للشعب
Thursday, Sep 18, 2025

Low-wage workers are getting 'eye-popping' pay raises, Goldman Sachs says

Low-wage workers are getting 'eye-popping' pay raises, Goldman Sachs says

Low-wage workers are making "eye-popping" gains in their paychecks, according to Goldman Sachs.

The bank told clients in a note Thursday that low-wage-worker pay rose 5.3% year-over-year in the second quarter. For the third quarter, the data isn't complete yet, but preliminary readings are on pace for a three-decade high of 6%.

Some industries posted even more significant increases in wages during the second quarter, including a 13% year-over-year spike for leisure and hospitality nonsupervisory workers. Since March, the industry's wages have risen 22%, mostly because emergency unemployment benefits included in the American
Rescue Plan took a larger effect on labor supply at lower wage levels. Skyrocketing wages can also be attributed in part to the rising demand for low-wage workers as the service sector has started recovering following a surge in vaccination, according to the report.

But Goldman Sachs warned that these wage indicators "cannot be taken at face value" because they are being distorted by the pandemic.

Inflation concerns


As the economy has recovered from the Covid crisis, employers have struggled to find workers amid an ongoing labor shortage. To attract employees, many employers have hiked pay.

Low-wage-workers' pay growth drives inflation for for low-skill consumer services, including hotel lodging, dining and dry cleaner services.

But if low-wage-worker pay continues to rise, it will probably contribute to boosting inflation even more, as companies hand customers the bill for their increased overhead. A key measure of inflation, the PCE price index, which tracks consumer spending, was up 4.3% over the 12 months ending in August, marking the fastest increase since January 1991.

Some consumer services have admitted to raised their prices in response to wage pressure. Chipotle (CMG), for example, raised its prices by about 3.5% to 4% in June after it raised employee hourly wages by about $2 to an average of $15.

Although rising wages are a good thing for low-wage workers who have struggled with stagnant compensation while corporate profits have soared, low-wage growth could signal that inflation isn't as transitory as the Fed might like.

But pay raises alone haven't been enough to bring some workers back on the job: Although job gains were looking promising over the summer, the United States only added 235,000 jobs in August, because of the Delta variant.

Continued wage growth could normalize given the end of unemployment benefits, or if there is a better-than-expected growth in the labor force. If wage growth continues to increase and exert upward pressure on inflation though, prices for consumers could continue to rise well into 2022.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
×