Laleh Hassibi, PayScale
The PayScale Index for Q4 2013 shows an 18 percent rise in Oil and Gas sector wages since 2006; small company wage growth has stalled; annual wage growth of 0.7 percent is predicted for Q1 2014.
Our first forecast was very close
Last quarter, we predicted U.S. national wages would grow 0.1 percent between Q3 and Q4 2013. The actual quarterly growth calculated for this Q4 2013 release is 0.2 percent. We were so close! For Q1 2014, we forecast quarterly wage growth to be a slight uptick of 0.2 percent, resulting in annual wage growth of 0.7 percent.
“2013 proved to be a disappointing year for wage growth,” said Katie Bardaro, lead economist at PayScale. “Wages grew by less than 0.5 percent for the year compared to almost 3 percent growth in 2012. Our forecast for Q1 2014 predicts the slow wage growth in 2013 will continue into 2014.”
Real wages still behind 2006 rates
In Q3 the PayScale Real Wage Index was introduced which tracks the percentage change in real wages since 2006. This measures the buying power of the income for a typical full-time, private industry worker. PayScale calculations for Q4 2013 show that even with continued growth, current wages still have less buying power than they did in 2006.
“We see that nominal wages have not kept pace with inflation,” Bardaro said. “In fact, real wages have dropped slightly more than 7 percent since 2006. This means the increases observed in nominal wages are not enough to outpace the increases experienced in the prices of goods and services. In other words, the income for a typical full-time, private industry worker buys them less than it did in 2006.”
Key findings from the Q4 2013 PayScale index:
- Oil and Gas is hot
Wage growth in the Oil & Gas sector is now fully recovered from the Q2 2013 dip, rising above its previous peak in Q1 2013. Wages in the Oil and Gas industry have now grown 18 percent since 2006 – the largest growth by far of any PayScale Index measure.
- Small company wage growth has stalled
After a steep rise to the top, wage growth for small companies fell below both medium and large companies. Wages in Q4 2013 fell by 0.2 percent for small companies, but grew by 0.1 percent for large companies and by 0.5 percent for medium companies.
- Food Service was a roller coaster ride
Food Service experienced both ups and downs this quarter. Wages dropped 0.2 percent this quarter, but were up 0.7 percent year-over-year, putting them in third place for annual growth across included industries. Food service jobs did better with quarterly growth of 0.3 percent and annual growth of 1.9 percent.
- It’s been a downhill ride for Transportation
For the first time in more than a year, wages fell in the Transportation sector. Wages fell 0.8 percent this quarter for the Transportation industry, but annual growth was 1.2 percent. Wages for Transportation jobs also fell this quarter by 0.9 percent.
- Tech is hot, sort of
Wages for the Tech sector continued to heat up, but remain below previous flame points. After some sluggish growth in early 2013, wages for IT jobs rose 0.2 percent over the quarter and 1.2 percent over the year.
- Canada and the UK are beating the US
The PayScale Indices for Canada and the United Kingdom show both countries outpacing US growth in wages. Wages in the UK are up 8.3 percent since 2006, outpacing the 7.4 percent US wage growth by almost a full percentage point. Meanwhile, 11.2 percent wage growth has Canada outpacing the US by almost 4 percentage points.
To view the trends for your country, please visit our Compensation Trends web page to request a complimentary Index report for the United States, Canada or the United Kingdom.