With compensation dominating headlines, employees are demanding higher pay.

Two remarkable events that took place in August may signal an accelerating trend: Employers should prepare to offer higher pay if they want to retain workers.

* First, members of the Teamsters Union, which represents workers at United Parcel Service, overwhelmingly approved a new collective bargaining agreement that will see drivers' average total compensation reach $170,000 by the end of the five-year contract.

* Second, according to the Federal Reserve Bank of New York's Survey of Consumer Expectations, the reservation wage--the lowest wage respondents would be willing to accept for a new job--has risen to almost $79,000. For men, the reservation wage was even higher: $91,048. Women's pay expectations rose sharply, up 11% compared to a year ago, to $66,068. College graduates had even greater expectations; their reservation wage skyrocketed to $98,000 annually.

Both indicators point to increasing pressure on wages as employers continue to grapple with labor shortages and the unemployment rate remains low at 3.8%.

It's clear workers at every level want more pay before agreeing to take a new job. Some reasons are obvious. They're looking around and seeing other workers making huge gains through union contract negotiations and threats of strikes...