Andy Katz, president of Manpower in Las Vegas, said employers will generally offer raises of 3.5 percent to 4 percent in 2007. Photo by Gary Thompson.

Major industries such as gaming and construction, with the exception of home builders, have performed well in Las Vegas' economy and have the ability to hire more people and pay better salaries in 2007, a local economist said.

Whether they will depends on the companies' goodwill and forward planning, said Keith Schwer, director of the Center for Business and Economic Research at University of Nevada, Las Vegas.

"In a growing economy, you're likely to see wages grow relative to inflation," he said. "My first guess is in the 3 (percent) to 5 percent range."

Inflation is running at 2 percent to 3 percent and worker productivity has increased over the last several years, which has made it possible for businesses to give raises, Schwer said.

In a business-owner survey the center conducted, 71 percent of respondents said they expect to pay higher wages in 2007. The question of how much is probably mixed locally, Schwer said.

"They'd like to hire Superman and pay him peanuts, but that doesn't happen," he said. "That's how the market works. If you want good workers, you pay more. If you can't pay more, shut up and go to work."

Andy Katz, president of the Manpower professional staffing agency in Las Vegas, said the biggest demand is for people in higher-level finance and construction management. His agency is also focusing on midlevel accounting and information technology positions.

With the cost of living rising at 3.5 percent to 4 percent, most employers will have to raise wages at that level to attract and retain quality staff, he said.

"Everyone's going to have to turn up their efforts on recruiting, whether it's from other states or other employers," Katz said. "You want to keep the people you have, at least the ones you want to keep."

Rising salaries put inflationary pressure on the economy, something that the Fed is no doubt closely monitoring, he said. At the same time, more money in the pockets of small business employees means more consumer spending.

Although salaries are expected to increase 3.1 percent nationwide, they're projected to rise nearly 5 percent locally, said Jeremy Aguero, principal of Applied Analysis, a Las Vegas-based research firm. The largest increases will be in business and professional services such as architects, engineers, lawyers and accountants, he said.

The technology industry historically has had some of the higher budgets for pay raises, but is expected to see average merit increases of only 4 percent this year, said Joe Duggan, president of Hopkinton, Mass.-based ICR Ltd. The company performs salary surveys in the consumer goods and high technology industries.

"This is no significant change over 2006," Duggan said. "While many companies in the (technology) industry had instituted pay freezes earlier this decade, that's very rare today, but average raises haven't increased much either.

"I read articles questioning whether record corporate profits will drive larger wage gains in this country, but I believe the size of base salary raises is almost entirely related to supply and demand. In general, U.S. technology firms aren't experiencing the severe shortages of candidates such as what is happening in India and China, so I don't expect any significant rise in pay increases in the near term," he said.

As a point of reference, he said budgets for merit raises in most countries around the world are in the 3 percent to 7 percent range. A few countries such as India, Indonesia and Venezuela exceeded 10 percent.

The average hourly wage for all industries in Las Vegas was $16.92 in late spring, up from $16.56 in 2005, survey data from the Nevada Department of Employment, Training and Rehabilitation show. Leisure and hospitality jobs paid the least at $12.11 an hour; government jobs ranked highest at $24.63 an hour.

Economist Jim Shabi of the state employment department said the occupational wage survey is not a true comparative series because the mix of employers is different each year. It's designed to take a snapshot in time, he said.

Nevertheless, Shabi said, wages in Nevada have gone up 2 percent to 3 percent a year on average for 20 years, outpacing inflation.

Aguero said workers can expect to pay more for health care benefits, which are considered part of a company's salary compensation package. Premiums for employer-sponsored health coverage rose 7.7 percent in 2006, the Henry J. Kaiser Family Foundation reported.

Although certain living costs are rising, including transportation and housing, other costs such as goods and services have been held in check by the "Wal-Mart effect" on retailing, Aguero said.

"Let's not forget about things we pay less for today," he said. "Electronics and computers are costing us less than they did 10 years ago."

Construction led employment growth in Las Vegas at about 11 percent last year, but that sector will probably decline in 2007 as home builders curb production, Schwer said. It won't be a dramatic drop because of other construction activity such as MGM Mirage's $7 billion Project CityCenter, which will employ more than 7,000 construction workers through 2009.

There won't be much of a wage increase at the basic, lower-end employment scale, but anybody with a skill or special knowledge can probably improve their income by moving from one company to another, Schwer said.

"We continue to attract people here because of the availability of jobs," he said. "It's one thing to talk about wages going up, but for some people, it's about just having a job or not. In the upper Midwest, Michigan has lost 300,000 jobs since 2000 and Nevada has gained 275,000. So they're sitting up there with no job, looking at Nevada where the wage hasn't increased. For them, any job is better than no job."