BLS DAILY REPORT, THURSDAY, SEPTEMBER 5, 1996 The New York Times (Robert D. Hershey Jr., page D1) says that, so far, the tightening labor market has generated only scattered -- and in most cases modest -- pay increases. Most companies, unable to pass on higher costs by raising prices because of intense competition from foreign and domestic rivals, are working even harder to keep a lid on labor cost, in part by adopting novel ways of coupling pay to profits ....But with unemployment already low and the economy looking stronger than expected this summer, more analysts are worried that it may be only a matter of time before wage pressures begin to build again as they did in the late 1980s ....While there are still areas of the country where job prospects remain weak, in many states employers are finding it hard to attract good workers. A chart shows the unemployment rates for each state during the second quarter of 1996. States are rated according to how employment varies from its so-called natural rate of joblessness, defined as the lowest level that allows for wage stability, calculated on a state-by-state basis by Regional Financial Associates, an economic research firm in Pennsylvania ....Another chart shows "wage gains still modest," using the ECI. Sens. Kerrey (D-Neb) and Hatfield (R-Ore) are planning to send President Clinton a letter urging him to support a downward adjustment of 0.5 percent point in the CPI formula and using part of the resulting savings to fund pending appropriations bills ....Kerrey and Hatfield are circulating a draft of their letter to all members of the Senate to get their signature in support of the proposal ....(Daily Labor Report, page A-8). More workers will join labor unions in the coming years as a way to protect against job insecurity and to gain bargaining power, Labor Secretary Reich predicts, pointing to what he calls a new "vitality" in the labor movement. Companies, on the other hand, are expected to continue to draw on diverse workforces to be competitive and are likely to continue to push health care costs on to their employees, the secretary says. Reich made the predictions in his Labor Day address ....(Daily Labor Report, Sept. 4, pages 1,A-2). The administration will be "twisting a lot of arms" to prod businesses to create 1 million jobs for welfare recipients by 2000, Labor Secretary Reich says. While some of the jobs for welfare recipients will be public sector jobs, most will have to come from the private sector, Reich told BNA ....(Daily Labor Report, Sept. 4, page A-7). DUE OUT TOMORROW: The Employment Situation: August 1996
