U.S. Wage Growth Remained at 3.2% for Fourth Quarter 2019
Thursday, January 23rd, 2020
Wages for U.S. workers grew 3.2 percent over the last year, increasing the average wage level by $0.88 to $28.93 an hour, according to the ADP Research Institute Workforce Vitality Report (WVR) released today. The wage growth of 3.2 percent corresponds to the Bureau of Labor and Statistics (BLS) numbers of 2.9 percent which was published this month.
"The final quarter of 2019 was marked with a slight deceleration in job growth and wage growth was unchanged," said Ahu Yildirmaz, co-head of the ADP Research Institute. "Wage growth for holders and entrants decelerated, whereas switchers experienced acceleration."
Earlier this year, job holders, job switchers, and entrants saw wage growth of 5 percent or better; however, job holders are now seeing only 4.6 percent growth, entrants stand at 4.9 percent, and switchers came in at 5 percent.
Wage growth across industries had been tightly clustered between 3.5 percent and 4.5 percent; however, the differences are becoming clearer. Resources and mining continues to be the weakest performer, with wages falling year-over-year. Education and health services also experienced low wage growth at 1.8 percent, less than half the rate from one year ago. However, job holder wage growth in education and health services remains above 4 percent and employment growth is among the strongest of any industry, indicating that overall wage growth is likely being weighed down by changes in industry worker composition.
Table 1: Wage and Employment Growth by Industry – December 2019
|
Industry |
Wages |
YOY Wage Growth |
Yearly Growth |
||||
|
All |
Holders |
Entrants |
Switchers |
Employment Growth |
Switching Rate |
||
|
-ALL- |
$28.93 |
3.2% |
4.6% |
4.9% |
5.0% |
1.6% |
20.5% |
|
Goods |
|||||||
|
Construction |
$29.45 |
4.3% |
5.0% |
2.1% |
7.9% |
4.3% |
15.9% |
|
Manufacturing |
$30.33 |
4.0% |
4.9% |
3.8% |
5.2% |
0.2% |
17.9% |
|
Resources and Mining |
$34.82 |
-0.9% |
4.1% |
-2.3% |
4.4% |
-2.4% |
10.0% |
|
Services |
|||||||
|
Information |
$41.97 |
2.2% |
5.2% |
-1.7% |
11.0% |
0.8% |
18.9% |
|
Finance and Real Estate |
$34.36 |
4.3% |
4.7% |
2.6% |
6.0% |
1.5% |
18.7% |
|
Professional and Business Services |
$36.70 |
3.3% |
4.5% |
3.1% |
7.7% |
2.0% |
23.8% |
|
Education and Health Services |
$27.54 |
1.8% |
4.2% |
4.8% |
3.1% |
2.5% |
19.4% |
|
Leisure and Hospitality |
$18.11 |
5.5% |
5.5% |
2.8% |
-2.6% |
2.2% |
24.4% |
|
Trade, Transportation, and Utilities |
$25.40 |
3.5% |
4.6% |
8.1% |
3.4% |
0.4% |
20.9% |
Workers in the Midwest outpaced other regions with 3.9 percent wage growth, although the hourly wage rate was the lowest at $27. The Midwest also experienced the lowest employment growth at 0.8 percent. Job switchers fared best in the West experiencing a wage growth of 6.7 percent, while job entrants in the Northeast fared the best with wage growth of 6.2 percent. By firm size, workers at large firms had the highest wage growth rate at 3.4 percent, with employment growth at 3 percent.
Table 2: Wage and Employment Growth by Region and Firm Size – December 2019
|
Region |
Wages |
YOY Wage Growth |
Yearly Growth |
||||
|
All |
Holders |
Entrants |
Switchers |
Employment Growth |
Switching Rate |
||
|
-USA- |
$28.93 |
3.2% |
4.6% |
4.9% |
5.0% |
1.6% |
20.5% |
|
MIDWEST |
$27.00 |
3.9% |
4.5% |
5.3% |
4.7% |
0.8% |
19.4% |
|
NORTHEAST |
$32.43 |
2.7% |
4.6% |
6.2% |
5.4% |
1.3% |
21.8% |
|
SOUTH |
$27.00 |
2.9% |
4.4% |
4.5% |
4.0% |
1.8% |
20.4% |
|
WEST |
$31.18 |
3.2% |
5.1% |
4.2% |
6.7% |
2.3% |
20.8% |
|
Company Size |
|||||||
|
-ALL- |
$28.93 |
3.2% |
4.6% |
4.9% |
5.0% |
1.6% |
20.5% |
|
49 or less |
$26.74 |
2.7% |
3.9% |
4.7% |
3.2% |
0.3% |
14.6% |
|
50 to 499 |
$29.07 |
3.1% |
4.7% |
2.5% |
5.5% |
0.3% |
22.7% |
|
500 to 999 |
$30.04 |
2.9% |
4.9% |
5.0% |
4.8% |
3.0% |
21.1% |
|
1000 or more |
$30.00 |
3.4% |
4.9% |
6.5% |
5.2% |
3.0% |
23.1% |
