The PayScale Index: Wages Finally Climb Back

The Economy Really is Recovering

By Tripp Ritter, PayScale

PayScale’s data on the economy can get pretty specific. With tens of millions of data points on jobs, we often drill deep down to see what is happening in a particular industry or in a particular city. Other times, we take a look at the economy as a whole. When we want to look at what is happening in the economy at all levels, we turn to The PayScale Index.

The PayScale Index follows the change in wages of employed US workers, revealing trends in compensation over time. It specifically measures the quarterly change in the total cash compensation of full-time private industry employees nationally, with additional detail on 15 industries, the 20 largest metropolitan areas, 19 job categories, as well as small, medium and large companies.

When asked about The PayScale Index’s major take-away from this quarter, Katie Bardaro, Analytics Manager at, said, “The real headline is that things are looking up. The Index shows the highest increase in wages in three years. In fact, national wages are now finally back at levels last seen in late 2008.”

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Bardaro says that, coupled with the increases in hiring and consumer spending, the strong boost in wages means we are finally seeing a real economic recovery. Of course, not every region is doing well, nor is every industry. Some continue to stumble along, or even fall behind, but the country on the whole is moving forward.

What are some of the insights provided by the recent update in The PayScale Index?

• The Puget Sound metros lead the way in wage growth. The Seattle metro saw a 3.2% growth from Q1 2011 to Q1 2012. Houston (2.7%), Philadelphia (1.8%) and St. Louis (1.7%) were the next highest.

• Houston’s growth is partially fueled by the powerful surge in wages in the Mining, Oil & Gas Exploration industry. That industry led wage growth at 4.9% from Q1 2011 to Q1 2012.

• While most industries grew in the past year, a lone industry saw a drop in wages from Q1 2011 to Q1 2012. Food Services & Accommodation is still fighting negative conditions and as a consequence wages declined 0.2%.

• Workers at larger companies saw bigger wage increases than those at small companies. Large company employees enjoyed increases of 2.5%, three times the rate experienced by small company employees.

In upcoming posts, we’ll explore these and other findings. Look for details on activity in certain industries, cities and company sizes. In addition, we will talk how about to use the Index in your compensation planning.

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