RICHMOND, Virginia (Reuters) - Companies are having a hard time finding workers in many parts of the United States and need to offer more incentives to pull them into the economy, Richmond Federal Reserve Bank President Thomas Barkin said Thursday.
U.S. unemployment is at 50-year lows but wages have not increased as much as they did in the past when the labor market was tight, in part because employers feel that they cannot afford to pay more, he told reporters after a public speech.
“There are many, many sectors where employers feel capped at their ability to increase wages, because they feel capped at their ability to increase prices,” Barkin said, noting firms were grappling with international competition or customers with strong buying power.
“Until we break through that it is very hard to see wage inflation of the type we saw in ‘99 or 2007.”
The biggest population that would have historically been in the workforce, but is not right now, is working class women, he said, adding that this was irrespective of whether they have children at home or not.
“That has a lot to do with the current incentives in that wage class,” he said. Many of these women are on disability, he added, and the math of coming off disability and taking a job as, for example, a Walmart greeter “is not that attractive”.
Reporting by Heather Timmons; Editing by Edwina Gibbs