GOLDMAN SACHS: Buy these 15 stocks to profit from the coming wage-growth explosion

Reuters / Charles Platiau

• As the labor market reaches its tightest level since 2000, Goldman Sachs expects wage growth to be pushed higher.
• The firm has identified 15 companies that it expects to outperform the broader market as wage growth accelerates.

It's a great time to be a US corporate employee.

The unemployment rate sits at 3.8%, its lowest level since 2000, and Goldman Sachs expects it to decline even further. That's great news for wages, which get squeezed higher when the labor market tightens.

Goldman's own model - pictured in the chart below - backs up this assertion.

Goldman Sachs

And while this is fantastic news for US workers, it's a troublesome development for companies. Sure, the massive windfall from the GOP tax law has boosted net profit margins to record levels, but rising wages are expected to put serious pressure on pre-tax margins, says Goldman.

With that in mind, there's great value in knowing which companies are best positioned to withstand wage inflation. With less vulnerability to higher labor costs, these firms have a higher likelihood of generating robust profit growth, which has long been the primary driver of stock gains.

Without further ado, here are 15 stocks Goldman says will outperform as wages grow, ranked in decreasing order of implied labor cost as a percentage of revenue.

Get the latest Goldman Sachs stock price here.