PayScale Index Q4 2015 Highlights

Wage Recovery in Q4 Exceeds Expectations

  • Wage recovery in Q4 outpaced predictions. Last quarter, PayScale predicted quarterly growth of 0.1 percent and annual wage growth of 0.6 percent. However, wages actually rose 1.1 percent in Q4, resulting in an annual growth of 1.5 percent. PayScale predicts a slight downtick in wages (-0.2 percent) in Q1 2016.

  • Tech continues to climb after a slow start to the year. If there is a tech bubble, it's not going to burst anytime soon. After wages for IT jobs fell for the first two quarters of 2015, they picked up once again in Q4, growing 1.3 percent for the quarter and 1.2 percent for the year.

  • Tech isn't the only STEM field where wages rose.  Due to this round of strong growth, IT Jobs, Engineering Jobs, and Science and Biotech jobs have all recovered from the major dip their wages took in the first half of 2015. Biotech jobs rose 1.1 percent and Engineering Jobs rose 0.8 percent.

  • Metros with a high prevalence of STEM workers also performed well this quarter. San Francisco topped the list of metros for annual wage growth with 2.5 percent, while Boston and Seattle experienced annual growth of 1.4 and 1.3 percent respectively.

  • Despite the crash in oil prices wages for Mining, Oil and Gas Exploration showed signs of recovery. Wages for this industry fell for the first three quarters of 2015, but then came back in a big way in Q4 with 1.6 percent quarterly growth.

  • But annual wage growth for Mining, Oil and Gas is still in the red. The big increase in Q4 wasn’t enough to fully recover from the dips earlier in the year, so wages are still a paltry -0.2 percent compared to last year.

  • Similarly, wages in Houston, a metro dominated by the oil industry, fell more this quarter, falling 0.9 percent. When local economies rely heavily on an industry or job type, their wages fall and rise with those trends.

  • This doesn't mean the crisis is over. However, given the price of a barrel of oil is around $40, which is less than half of the $90-$100+ prices seen last year, this wage increase is likely a flash in the pan and not signs of recovery. Whether the wage growth for the oil and gas industry is sustainable will hinge upon the price of oil and U.S. production levels.

  • Construction also shows signs of recovery. Just like in Q3, Construction and Real Estate showed slightly larger wage increases than last year (0.6 percent and 0.8 percent respectively), causing them to recover and then some from their earlier dip.
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Methodology for The PayScale Index: Trends in Compensation
The PayScale Index tracks quarterly changes in total cash compensation for full-time, private industry employees in the United States. In addition to a national index, it includes separate indices for specific industries, metropolitan areas, job categories, and company sizes. The PayScale Index uses 2006 average total cash compensation as a baseline.

See full methodology for compensation trend reports.

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