Catherwood LibraryILR School

Early indications of wage pressures in pockets of corporate America have begun emerging in recent weeks. Executives from nearly 20 S&P 500 companies have flagged labor costs, shortages or wage pressure as headwinds for U.S. companies in 2016, up from about a dozen companies who singled out these concerns a quarter earlier and a year ago. Wage inflation has been largely nonexistent over the past six years, a key factor behind the robust recovery in company profits during the economic expansion out of the Great Recession. Now, though, a combination of rising U.S. payrolls, political pressures to increase state and federal minimum wages and some industry-specific issues, such as expensive labor contracts in the airlines and automakers and labor shortages in construction, could contribute to increased labor costs.