Express Employment Professionals recently released results from a survey of businesses on the state of the job market, revealing a majority of small and medium-sized businesses believe wages will be stagnant over the short-term.
Respondents were asked whether they expect wages in their respective markets to increase, decrease or stay the same over the next three months. The majority predict short-term wage stagnation: 61% expect wages to stay the same, but more than a third or 38% expect an increase. Only 2% expect wages to decrease.
When asked about the “current employment environment in your market,” 68% of companies surveyed responded that it was “trending up,” compared to 32% who said it was “trending down.”
Businesses were also asked if they foresee a recession in the near future. Overwhelmingly, 94% of businesses surveyed don’t foresee a nationwide recession in the next three months.
Eighty percent of businesses surveyed don’t foresee a recession in three to six months, while 69% don’t foresee a recession in six months to a year. Seventy percent indicated no recession in a year. Additionally, 65% of business owners don’t expect a recession in two years, however, 35% anticipate a recession in two years.
“These survey results are a mixed bag. Many companies are cautiously optimistic but still have some hesitation about the strength of the economy in the near future,” said Bob Funk, CEO of Express and former chairman of the Federal Reserve Bank of Kansas City.
“It’s good news for employees that wages are not declining, but we would rather see them rising than flat-lining. The tight labor market continues to put pressure on the need for wage increases but employers are reluctant to increase pay given the uncertainties about the strength of the economy,” Funk said.
“And while most businesses don’t predict a recession in the next near future, it’s troubling that many companies foresee a recession in two years. Of course, we would all prefer to see an even more positive outlook after this slow recovery but that won’t happen until government eases up on regulatory change for businesses.”
The survey of 390 businesses in the United States and Canada that are current and former clients of Express Employment Professionals was conducted in the first quarter of 2016.