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The PayScale Index Shows Signs of a Continuing, but Slow Recovery

Oil & Gas and Technology industries suffer second consecutive cooling off quarter while the Manufacturing industry rebounds; small company wages increase but at slower clip versus medium- and large-sized companies
Seattle - July 9, 2013 - PayScale, Inc. today released The PayScale Index for Q2 2013, which tracks quarterly trends in compensation.

The drop in wages during Q1 2013 was, seemingly, a blip as this quarter's Q2 2013 PayScale Index 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. Furthermore, previously high-performing industries (e.g., Healthcare, 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, tying at #7 for annual growth (3.1 percent) with Business Operation Support Services.

  • 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 4.1 percent (compared to around 2 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 amongst the Canadian metros 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."

About The PayScale Index

The PayScale Index follows changes in total cash compensation for full-time, private industry employees in the United States and Canada. In addition to a US national index and a Canadian national index, it includes separate indices for the following:The PayScale Index utilizes a unique approach to trend measurement. Unlike indices such as the Consumer Price Index, which measures the prices of certain goods and services (periodically updated to reflect changes in buying habits of Americans), The PayScale Index uses data on all private-sector, full-time employees working in a given time period.

PayScale has performed a detailed analysis of how various compensable factors, like work experience, education, employment setting and job responsibilities affect pay. This analysis is based on PayScale's extensive data of more than 40 million employee profiles, accounting for 250 compensable factors for more than 14,000 unique job titles, which show how the pay of actual workers varies with each of these factors.

About PayScale

Creator of the largest database of individual compensation profiles in the world, PayScale, Inc. provides an immediate and precise snapshot of current market salaries to employees and employers through its online tools and software. PayScale's products are powered by innovative search and query algorithms that dynamically acquire, analyze and aggregate compensation information for millions of individuals in real time. Publisher of the quarterly PayScale Index™, PayScale's subscription software products for employers include PayScale MarketRate™ and PayScale Insight™. Among PayScale's 2,200 corporate customers are organizations small and large across industries including Zappos, Volunteers of America and Manpower. For more information, visit

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