Laleh Hassibi, PayScale
The Q2 2014 PayScale Index shows inconsistent wage growth across the board, as some industries such as IT and oil and gas experienced solid year-over-year gains, while wage growth in other industries actually declined. The PayScale Index also forecasts national quarterly wage growth in Q3 of 0.3 percent, resulting in sluggish annual wage growth of 1.9 percent. In addition, the PayScale Index shows real wage growth is down almost 8 percent since 2006, a measure that is calculated by analyzing nominal wage growth and the average change in price of a fixed basket of goods and services.
“Today, the income for typical full time, private industry worker actually buys them less than it did in 2006. Annual U.S. wage growth was 1.8 percent last quarter, but inflation in Q2 was the highest it’s been in three years,” said Katie Bardaro, lead economist at PayScale. “As a result, the high inflation essentially wiped out wage growth and consumers experienced no real wage growth in terms of their actual purchasing power.”
To download the PayScale Index for your country, visit www.payscale.com/hr/compensation-trends.
Here are some other key results from the Q2 2014 PayScale Index:
- The mining, oil and gas industry experienced an impressive 20.5 percent increase in wage growth since 2006. This industry has seen the highest total wage growth each quarter during the last eight years with an increasing lead on all other industries.
- Wage growth for both information technology and engineering jobs was 11.2 percent higher last quarter when compared to 2006. IT jobs showed a 2.6 percent annual gain in Q2.
- There are signs real estate may be recovering, as the industry saw the third best annual wage growth in Q2 of 2.1 percent. However, the major wage declines of 2013 mean the industry has only gained 7 percent since 2006.
- The accommodation and food service industry continues to struggle, as it experienced an annual drop in wages of 0.3 percent; the only negative growth for any industry in the Index. This industry also experienced the smallest wage growth since 2006 at only 4.2 percent.
- The top five metro areas experiencing the highest annual wage growth in Q2 are Houston, TX (3.0 percent), Minneapolis St. Paul, MN (2.7 percent), Detroit, MI (2.4 percent), Chicago, IL (2.4 percent) and Boston, MA (2.2 percent). Only Phoenix, AZ and Miami, FL experienced decreases in annual wage growth at -0.1 percent and -0.6 percent respectively.
- Annual national wage growth in Canada was 0.8 percent, less than the U.S. growth of 1.8 percent. Vancouver, B.C. beat out the two oil towns of Edmonton, AB and Calgary, AB for Canadian metros with annual wage growth of 1.1 percent, while Edmonton, AB and Calgary, AB had growth of 0.8 percent and 0.9 percent respectively.
- In the U.K., wages increased 0.9 percent between Q1 and Q2 2014; the highest quarterly growth in two years. Annual wage growth was 1.2 percent in Q2, lagging behind the U.S. at 1.8 percent, but above Canada 0.8 percent. U.K. national wages are up 8.5 percent since 2006.
About The PayScale Index
The PayScale Index follows changes in total cash compensation for full-time, private industry employees in the U.S., Canada, and the U.K. The PayScale Index also includes:
- A forecast of the National U.S. PayScale Index for Q3 2014
- A PayScale Real Wage Index, which tracks changes in wages adjusted for inflation since 2006
For more information on The PayScale Index, please visit www.payscale.com/hr/compensation-trends