Although wages fell by 0.1 percent in Q3 2014, year-over-year growth is still positive at 1.2 percent. That means that wages are still higher than they were this time last year. Next quarter, though, PayScale predicts a return to slow but steady growth with a three month wage growth of 0.3 percent, resulting in year-over-year growth of 1.3 percent in Q4 2014.
Real Wages Continue to Fall
Compared to 2006, real wages (adjusted for inflation) are down 8.7 percent overall. That means that despite the gains we’ve made since the Great Recession, the buying power of the typical worker’s salary is still almost 9 percent lower than it was eight years ago. To produce the PayScale Real Wage Index
, which tracks the percentage change in real wages since 2006 and measures the buying power of the income for a typical full-time, private industry worker, PayScale incorporates the Consumer Price Index (CPI) into The PayScale Index.
Winners and Losers
- Information technology jobs surpassed engineering jobs for highest pay growth since 2006. Even though both IT and architecture/engineering jobs had relatively small wage growth in Q3 2014 (1.4 percent and 1.3 percent, respectively), IT now has the highest overall wage growth since 2006 (11.5 percent).
- Sales jobs saw the highest quarterly wage growth this quarter (2.9 percent), followed by Human Resources (HR) with 2.7 percent.
- Despite having the second lowest annual growth (1.1 percent) in Q3, the mining, oil and gas industry has seen the highest total wage growth since 2006 – wages are 18.5 percent higher now than they were in 2006.
- Houston, Texas saw no wage growth in Q3 2014 but still leads all other metro areas in highest total wage growth since 2006 (13.3 percent).
- Boston had the highest annual growth this quarter (2.8 percent), followed by fellow tech hotspot Seattle (1.9 percent).
- Accommodation and food service saw its first industry-wide annual increase (1.7 percent) since Q2 2013, but still has the second smallest wage growth since 2006 of any industry.
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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