Americans took home smaller pay raises last year

Over the last year, average annual pay increases have dropped to 3.5 percent, down from average raises of 5 percent for the 12 months ending Oct. 1, 1985, the Labor Department reported Tuesday. White-collar workers have received annual wage and salary increases averaging 4.1 percent over the last 12 months, while blue-collar workers have seen their annual pay raises drop to an average 2.5 percent, the Bureau of Labor Statistics (BLS) said.

Over the same 12 months a year earlier, white-collar workers had enjoyed pay raises averaging 5.4 percent, while blue-collar workers received average wage increases of 4.3 percent, the BLS said in its quarterly report on employment costs.

Since June 1981, five months after President Reagan took office, workers in private industry have seen their pay checks rise 28.8 percent, the bureau said.

During that same time, the Consumer Price Index has risen 21.7 percent, an indication that wages are keeping well ahead of inflation.