Workers' compensation rose slightly faster last year than in 2009, but the increase still was the second-lowest in nearly three decades.
Wages and benefits increased2 percent last year after rising1.4 percent in 2009, the Labor Department reported Friday. Those gains were the two smallest on records going back 28 years.
The modest gains reflect a severe recession that pushed millions out of work and depressed the bargaining power of those with jobs.
While weak wage gains mean low inflationary pressures, they also leave households with less income to boost consumer spending.
Analysts predict labor costs will remain constrained as long as unemployment stays elevated. Many economists believe the unemployment rate, which stood at 9.4 percent last month, still will be nearly 9 percent a year from now.
The Labor Department's Employment Cost Index measures wages, salaries and benefits -- which include health insurance and pensions.
Wages and salaries rose 1.6 percent last year, a slight improvement from 2009's 1.5 percent -- the lowest annual gain on record.
Benefit costs increased at a faster pace -- 2.9 percent last year, nearly double the rise in 2009.
Labor Department analysts attributed the benefit acceleration to higher costs for retirement benefits.
For the fourth quarter, employment costs rose 0.4 percent, matching the increase in the third quarter and slightly lower than economists had expected.
The country lost 8.4 million jobs from December 2007 through December 2009. Last year, the net number of jobs rose by 1.1 million, but that still has left millions of people looking for work.