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The Morning Ledger: Companies Pay New Workers Higher Wages, and Current Employees Ask, ‘What About Us?’ |
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| When Chipotle Mexican Grill lifted the pay of hourly front-line workers to an average $15 an hour, it offered similar increases to managers. PHOTO: BRANDON BELL/GETTY IMAGES |
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Good morning. Companies across the U.S. economy are raising pay to recruit workers in a tight labor market, increases that are rippling through firms and prompting employers to rethink pay for existing staffers. So-called wage compression—when pay for new hires or entry-level staff approaches what longtime staff or senior colleagues make—poses a financial and management challenge for employers, and has gained new urgency as companies fight to attract and retain employees amid record-high rates of job-quitting. [Continued below…] |
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A variety of factors are driving up wages, especially at the lower end of the pay scale. Employers such as restaurants and amusement parks are raising pay to lure laid-off workers back to jobs that boomed when pandemic restrictions were lifted. U.S. employers added 850,000 jobs in June—the biggest gain in 10 months; July figures will be released by the Labor Department on Friday. Companies are bidding up salaries to poach from other firms, as quitting rates reach record highs. Wages for job-switchers rose 5.8% from June 2020 to June 2021, compared with a pay increase of 3.1% for people who had been in the same job for a year or more, according to payroll-data firm ADP Inc. Inflation Is Hot Now, but Investors Are Betting That Won’t Last Fed’s Brainard Says Labor Market Hasn’t Satisfied Goals for Reducing Bond Purchases |
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Arista Networks Inc., Eastman Chemical Co. and ZoomInfo Technologies Inc. are among the companies scheduled to release earnings today. The Institute for Supply Management’s manufacturing index for July—due out on Monday— is expected to remain elevated as factory activity continues to expand. On Wednesday, the Institute for Supply Management’s services index for July is likely to reflect another month of increasing activity across the sector. The latest U.S. trade deficit figures, due out on Thursday, likely widened in June. On Friday, economists are forecasting another strong month for U.S. job gains in July and a new pandemic low for the unemployment rate. |
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Polaris Considers More Price Increases |
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Polaris Inc.’s finance chief is weighing additional price increases and adding suppliers as part shortages dent the sports-vehicle maker’s retail sales. The Medina, Minn.-based manufacturer in May raised prices by an average of 2.5% across its portfolio. |
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ZocDoc Names Morgan Stanley Investment Banker as CFO |
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Medical startup ZocDoc Inc. named Edward Liu, a former Morgan Stanley investment banker, as its new chief financial officer as it looks to grow its business. Mr. Liu served as co-head of technology banking for the Americas at Morgan Stanley for about five years before joining ZocDoc on Monday. |
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| Square, known for its signature white card readers, plans to integrate Afterpay into its Seller and Cash App units. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS |
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Square Inc. has agreed to an all-stock deal valued at around $29 billion to acquire Australia’s Afterpay Ltd., an installment-payment company that positions its service as a cheaper and more responsible alternative to a credit card. Square said it plans to integrate Afterpay into its Seller and Cash App business units, which would allow more retailers to offer so-called buy now, pay later services at checkout. |
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| ‘We’re not able to ramp up as aggressively as we would like,’ said Optimus Technologies CEO Colin Huwyler. PHOTO: ROSS MANTLE FOR THE WALL STREET JOURNAL |
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Big companies raced ahead during the Covid-19 pandemic, leveraging the changes driven by the deepest business disruption in decades to grab a larger slice of the economic pie. Now, as the rich world bounces back from the shock, the heavyweights are extending that lead, spending more on investments and acquisitions, snapping up talent, employing big data and leveraging new technologies. Their success could set up a clash with antitrust regulators. |
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President Biden’s looming decision about who should be the next Federal Reserve chairman is prompting reviews of the current chief’s record on bank regulation and how strict the postcrisis rulebook should be for Wall Street. Two small U.S. solar companies plan to petition the government to extend tariffs on solar cell and panel imports, reigniting a fight that has split the industry—and one that could force the White House to choose sides. |
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U.S. household spending bounced back in June as consumers shelled out more on services at the start of the summer, but a current upswing in Covid-19 cases related to the Delta variant is injecting uncertainty into the economic outlook. Personal-consumption expenditures—a measure of household spending on goods and services—increased a seasonally adjusted 1% last month, the Commerce Department reported Friday. |
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Schaeffler AG, a German manufacturer of automotive products, said Chief Financial Officer Klaus Patzak plans to leave the company, effective July 31. Mr. Patzak has been in the role since August 2020. Schaeffler said it plans to appoint a successor shortly. |
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