Lower-paid Workers Seeing Larger Raises

If you are younger and not so well paid, you have a better shot at getting a higher raise right now than do older and better-paid workers.

This lower-paid, better-raise trend has recently been highlighted both by the U.S. Bureau of Labor Statistics and payroll company ADP. Average pay for those making less than $20,000 jumped 5.4 percent in the third quarter. Those making $20,000 to $50,000 saw wage increases averaging 4.9 percent. And Americans who are in the $50,000-plus pay range averaged raises of 4.3 percent in the third quarter.

Those on the lower end of the pay scale began to rack up bigger wage gains about a year ago. This trend is also improving the lot of those employed by restaurants and retail, as issues with some of their low wages have sparked protests across the country.

Economists aren't exactly sure why it's happening, leaving room only for speculation.

"Labor is getting a little bit tight at the bottom of the labor market, and in order to attract employees, the wage levels are being pushed up," said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. "Normally, wages at the low end increase when there's a shortage of workers."

Another factor being offered up for these low-wage hikes is that a number of states have individually passed legislation to increase their minimum wages.

One thing economy watchers seem to agree upon: The lower-wage raises help the economy, because these groups tend to spend, spreading the gains around.

"Whatever wage increase that they secure, that money is going to be spent," Hughes said. "It is going to benefit the consumption economy."