NEW YORK (CNN/Money) - The labor market may not be roaring ahead, but it is finally creating jobs at a respectable pace -- that much is clear from the government's December employment report.

So the next question is whether people's paychecks growing, and here the news is not quite so rosy.

When it comes to wages, the key number in the jobs report is average earnings, which rose 2 cents to $15.86 an hour last month, a gain of just 0.1 percent. Measured over the past year, earnings rose 2.7 percent, an improvement from earlier in the year when the number was running closer to 2 percent.

But with headline inflation running at better than 3 percent year-over-year, that 2.7 percent may not purchase much for most families.

And in an age of downsizing, outsourcing, and new technologies that eliminate the need for human workers, wages are under increasing pressure.

A report from the Economic Policy Institute (yes, they are card-carrying opponents of President Bush) this week pointed out that the wage gap between men and women has shrunk a bit. Not because women are making more money on average, but because men's wages have stagnated especially in typically male-dominated industries like manufacturing.

Lest we think that this hand wringing over wages is a product of the "whiny" Left, take a look at this survey from Michael Alter of Sure Payroll. His "Small Business Scorecard," based on actual payroll data from more than 14,000 companies, found that while small business jobs increased by 4.4 percent in 2004, the size of the average paycheck at small firms fell by 4.8 percent.

"More jobs at lower wages sums up the 2004 small business economy," Alter concluded, noting more people got jobs last year because small businesses were hiring.

"That's the good news," he notes. "The bad news is that, on average, small business employees are taking home smaller paychecks than they used to."

Remember that small businesses account for about two-thirds of the new hires in this country and half of the overall employment, so whatever is going on there affects a lot of people.

Some economists say the trend for wages will improve this year. They predict the economy will keep growing quickly enough to force employers to pay higher wages to keep the workers they have and to attract the ones they want.

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Others doubt that because with the specter of cheap labor overseas, companies -- and workers -- here feel that just keeping a job is enough, let along looking for a fatter paycheck.

And the skeptics point out that there are enough unemployed and underemployed workers out there to give employers the upper hand with existing employees (i.e. "If you don't like what I'm paying you, look for another job because I can find another one just like you").

Of course this varies from job to job, and from education level to education level. But it's one more reason why for some people the economy looks great and for others it's a struggle to keep their heads above water.  

Kathleen Hays is economics correspondent for CNN and contributes to Lou Dobbs Tonight.