In case you missed it, US job openings set a new high in May to almost 5.4 million, the highest level of job openings since December 2000. These jobs were mostly in nondurable goods manufacturing (like clothing, food, etc.) and state and local government. Meanwhile, the job openings rate — a measure of job openings compared with total employment — remained steady at 3.6% in May. While there was little change in the number of hires in all industries and regions over the month, the number of separations fell 3.1% to almost 4.9 million. Finally, unemployment is almost at pre-recession levels, 5.3%.

Job openings are up, hires are steady and separations are down, so what’s missing? Mostly wage growth. And that means buyers have to watch for bill rate increases. Upward pushes on wages through state and local initiatives plus stagnant wage growth may provide a ripe scenario for wage increases, and thus bill rate increases for you. Just when you thought you had a handle on the implications of the Affordable Care Act on your costs, wage pressure is arriving. Lower unemployment brings with it scarce supply for the talent you need and along with legislative and socio-economic pressures, higher prices could be in store.

First instituted in 1938 at 25 cents an hour, by1950, the minimum wage had risen gradually to 75 cents and has increased periodically ever since. With some minor adjustments in intervening years, the US minimum wage over time has looked roughly like this:

  • 1961: $1.00 an hour
  • 1970: $1.60 an hour
  • 1981: $3.35 an hour
  • 1991:$4.25 an hour
  • 1997: $5.15 per hour
  • 2009 to present: $7.25 an hour


The DOL has been actively advocating raising wage rates to $10.10 per hour and many states have already raised minimum wage above $7.25: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Hawaii, Massachusetts, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, New Jersey, New Mexico, New York, Nevada, Ohio, Oregon, Rhode Island, Vermont, West Virginia, Washington and Washington, D.C. More on the way to be sure. Add to that extra costs due to the ACA, mandated paid family and sick leave and you get the picture, cost of labor will increase.

Paid leave. Several states and municipalities have mandated paid family and/or sick leave, so buyers should be sure to keep up on these mandates to ensure compliance. The current mandates are in: California; Connecticut (sick leave); Massachusetts (sick leave); Minnesota (FML); District of Columbia; Jersey City, NJ; New York City; Philadelphia;, Portland, OR; Seattle and SeaTac, WA; and San Francisco.

However, some states are prohibiting municipalities from instituting minimum wage or benefits mandates: Arizona, Indiana, Kansas, Mississippi, Oklahoma and Utah. Buyers need to know who pays for contingent workers’ entitlement and when sick leave is used by contingent workers, make sure refusal is not considered retaliation in any manner.

The facts are pointing to increased pressure on wage and bill rates in the future. It’s not the direction CW managers would prefer. But managers need to be prepared and knowledgeable about federal, local, state and regional statutes and impending statutory benefits so you can get the best quality talent in the marketplace, while managing cost, driving efficiency and mitigating risk.