Who is worried about “wage inflation?”

Even though the unemployment rate has fallen to 8.5 percent in recent months, IHS Global Insight continues to expect much labor market slack in the coming quarters.

According to analysts, this should help keep a lid on employers’ compensation costs, and hence limit wage inflation. Key takeaways from the employment cost index (ECI), include these observations:

• Employment costs for civilian workers rose a shy 0.4 percent in the fourth quarter of 2011, with wages and salaries up 0.4 percent and benefits up 0.6 percent.
• Private industry compensation was up 0.4 percent while state and local compensation rose 0.3 percent.
• Year-over-year, compensation costs for civilians increased 2.0 percent, with wages and salaries rising 1.4 percent and benefits up 3.2 percent on higher health benefits.
• Private sector compensation rose 2.2 percent over last year, while state and local compensation edged up a meager 1.3 percent – the lowest increase on record (since 1982).

With our annual“Salary Survey”coming up in April, I invite readers to share their thoughts, impressions, and experience regarding wages and compensation.