Laleh Hassibi, PayScale
The drop in wages during Q1 2013 was, seemingly, a bump in the road for U.S. businesses as we surmised last quarter. Q2 2013 saw wage growth in most measures. However, wage growth overall has slowed down and annual wage growth, while still positive, is not as explosive as previous quarters. Previously high-performing industries (e.g., Healthcare, Biotech, Oil & Gas Exploration, etc.) floundered at the middle and bottom of the list this quarter.
"The recent jobs report, together with the rise in wages observed in The PayScale Index show signs of a continuing, albeit slow recovery," said Katie Bardaro, lead economist for PayScale. “As companies continue to demand more workers, wages increase. Given the positive correlation between employment and wage growth, if the next few months have equally positive job gains, then we can likely expect more wage growth in Q3.”
Q2 2013 PayScale Index highlights for the United States include:
- The Food Services & Accommodation industry came out on top, tied with Arts, Entertainment & Recreation with the highest quarterly growth.
- Typically, the Food Services & Accommodation industry has experienced little to no growth, but wages have been rising significantly over the last few quarters, resulting in a 3.9 percent annual growth for Q2 2013.
- Similarly, annual wage growth for Food Service & Restaurant jobs also had a strong performance with 3.6 percent growth.
- In Q4 2012, Media & Publishing jobs dominated annual wage growth rankings. In Q1 2013, they fell to the #5 spot, but in Q2, they rose back up to #1 with 4.5 percent annual growth – the highest annual growth of any PayScale Index measure.
- Wages have cooled off for the Oil & Gas sector.
- Wages in Q2 took a hit, falling 0.6 percent from the previous quarter and for the first time since early 2011, the Mining, Oil & Gas Exploration industry is near the bottom for wage growth among the industries.
- Similarly, cities with a strong presence of Oil & Gas continued to feel the pinch in Q2 2013. Wages in Houston fell 0.1 percent this quarter – a smaller drop than last quarter, which was the largest drop the city had experienced since mid-2010. Granted these drops are small in absolute terms, but relative to the usual large increases experienced over the last year or so, they are significant.
- Sales and Wholesale Jobs are on fire.
- Quarterly growth for Sales jobs for Q2 was 1.1 percent (tied with Media & Publishing jobs and Manufacturing & Production jobs for top quarterly growth) and annual growth was 4.1 percent (putting them at #2).
- Quarterly growth for the Wholesale industry was 1.3 percent – the highest of any industry. This strong quarterly growth pushed wage growth in the Wholesale industry to match national wage growth.
- Manufacturing jobs and the Manufacturing industry recovered from the hit they took last quarter.
- Wages for manufacturing jobs rose 1.1 percent this quarter, pushing annual growth up to 3.5 percent.
- Wages for the overall Manufacturing industry grew by 0.9 percent. This aligns with information released by the Institute for Supply Management, which tracks manufacturing activity. They found the manufacturing sector expanded in June.
- Wages for the Tech sector took a breather this quarter.
- Quarterly wage growth for IT jobs was only 0.3 percent, which was below the national quarterly wage growth of 0.5 percent. This measly quarterly growth pushed IT jobs out of the top five for annual wage growth for job families (3.5 percent) for the first time since Q2 2011.
- Similarly, wages for the Professional, Scientific & Tech Services industry only grew 0.3 percent this quarter, putting them at #8 for annual growth (3.1 percent).
- Quarterly wage growth for small companies fell behind both medium and large companies, but they are still on top for annual wage growth.
- Wages in Q2 2013 grew by only 0.4 percent for small companies, but grew by 0.9 percent for medium companies and by 0.8 percent for large companies.
- Although the growth for small companies was muted this quarter, they have experienced strong wage growth over the last few quarters and are still tops for annual growth with 5.5 percent (compared to less than 3 percent for medium and large companies.) Wage growth since 2006 is also still better for small companies than medium ones, but does not outpace large companies.
Q2 2013 PayScale Index highlights for Canada include:
- Edmonton, an oil town, claimed the top spot for annual wage growth with 4.4 percent.
- Montreal came in second for annual wage growth with 3.4 percent and, as of this quarter, no longer has the worst wage growth since 2006. This quarter, it rose above Toronto (9.3 percent vs. 8.2 percent).
- Vancouver experienced the largest quarterly wage growth with 1.3 percent and, for the first time, saw wage growth rise above the Canadian national index.
Adds Bardaro: "Wage growth in the U.S. was not enjoyed by all during Q2. Some industries that were previous wage winners, such as Mining, Oil & Gas exploration experienced a fall in wages this quarter. However, this industry is still at the top for overall wage growth since 2006 (18.7 percent compared to 8.5 percent nationally) and still remains above its pre-recession peak."