BUSINESS
01/13/2012 12:42 pm ET

Labor Market Poised To Ramp Up, But Wage Growth May Stay Low

The hiring outlook seems to be improving, according to some forecasts. What that means for the actual wages has yet to be decided.

A number of reports in recent days have suggested that hiring is on its way up in the new year. According to Bloomberg Businessweek, some economists believe the U.S. will see more jobs created in 2012 than any year since 2006, before the economy began to turn sour. Experts polled by the Associated Press said the economy would add 2.1 million jobs this year -- more than in 2010 or 2011. The National Federation of Independent Businesses recently posted one of their strongest hiring forecasts since the financial crisis. And the auto industry looks to be in an especially strong position, with factory payrolls poised to grow by 10 percent this year, according to the Los Angeles Times.

But it's still unclear if this projected job creation will help to restore the middle class, which has been squeezed in recent years by declining wealth and static incomes.

Some of the new jobs appear to come with an expiration date, including the 70,000 seasonal workers that Home Depot is hiring in anticipation of spring shopping. Seasonal positions can lead to permanent employment -- but often they don't, as seen with the recent spike in jobless claims believed to have been caused by holiday workers returning to the unemployment line.

And in many cases it appears that there's a trade-off between putting people to work and paying them what was once considered the standard wage. General Electric was able to add jobs in the U.S. after reaching an agreement with union workers to drop their starting salary to $13 an hour, according to Businessweek. Many new manufacturing hires are looking at hourly wages $10 to $15 below those of current employees -- and they may not catch up for years, if at all, according to The New York Times.

At a time when the median salary for American workers is only $26,364, and millions of people are struggling to afford the basic necessities, this lack of wage growth could prove politically disastrous for President Obama in the November election -- as could the unemployment rate, which is widely expected to remain high through the end of the year. While the jobless rate has slowly been falling in recent months, more than 13 million Americans remain out of work, and according to Gallup polls, the electorate is more worried about the state of the economy and the labor market than anything else.

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