(FORTUNE Magazine) – . Fatter paychecks. Workers covet them, economists predict them -- and the Federal Reserve fears them. Since they're the key to inflation, a mere glimpse of higher wages sends the bond market reeling. Yet despite expectations, so far they have failed to materialize. What's more, there seems little prospect for wages to move up significantly in the near term. During the past year, average hourly earnings for production and clerical workers have risen only 2.6%. Salaried employees at large and middle-size companies got 4.0% raises this year, according to a survey by Hewitt Associates, a compensation consulting firm. Looking ahead, the Labor Department says recent union settlements include wage increases averaging just 2.3% in the first contract year. None of this makes sense from a strictly economic point of view. The unemployment rate for the past half year has been down around 6%, a level that historically has triggered wage acceleration. In theory, some employers should be unable to find workers without having to bid them away from other companies. That isn't happening yet. Goldman Sachs economists think wages will continue to be contained because companies are relying more heavily on temporary workers and foreign manufacturers are keeping up the competitive pressure. The Fed, of course, has been raising interest rates to head off wage inflation. And layoffs at large companies dampen expectations of those with jobs. Like Houdini, wages will eventually work out of their shackles if economic growth remains solid, but it's not going to be an easy escape.

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