The PayScale Index tracks quarterly and annual trends in compensation. The latest Index for Q4 2017 shows that the aftershocks of The Great Recession continue to be felt as workers are still earning far less in real terms than they did before the economic crisis.
While nominal wage growth was 2.7 percent year-over-year (Y/Y) in 2017, most of this growth was devoured by inflation. Real wages increased by only 0.5 percent in 2017.
Wage growth was mostly devoured by inflation. Real wages increased by only 0.5 percent in 2017.
Growth Was Uneven Across the United States
Silicon Valley, and NYC led the pack in wage growth, while wage growth in Milwaukee and Philadelphia lagged. Wages in Silicon Valley (the San Jose metro area) continue their upward march with 1.6 percent quarter-over-quarter (Q/Q) nominal growth and 3.6 percent year-over-year growth, tying with New York City area for the fastest wage growth in 2017.
Pittsburgh continues to be an interesting area to watch. After a dismal Q3, wages rebounded with 1.7 percent Q/Q nominal growth in Q4. This catapults Pittsburgh into the top three metro areas for Y/Y nominal wage growth of 3.6 percent.
Portland (-0.8 percent), Miami (-0.4 percent), Kansas City (-0.3 percent) and Philadelphia (-0.2 percent) had all negative Q/Q nominal wage growth in Q4, while wages in Phoenix held steady. Meanwhile, lackluster Q4 growth in Phoenix puts the city at the lowest rate of Y/Y nominal growth (1.5 percent). Milwaukee (1.8 percent Y/Y) and Philadelphia (1.8 percent Y/Y) round out the bottom three metro areas.
The transportation and warehousing industry comes out on top for wage growth. Energy and utilities sees the smallest uptick.
While transportation and warehousing had a slow Q4 with just 0.3 percent Q/Q nominal growth, it still managed to come out on top for the year with 3.3 percent Y/Y growth. It joins real estate (3.3 percent) and nonprofits (3.2 percent) as the top three industries for Y/Y nominal wage growth.
Construction had the strongest Q/Q growth (1.2 percent) in Q4, possibly reflecting increased demand due to a particularly destructive hurricane season. The construction industry finishes 2017 with a 2.7 percent Y/Y nominal growth.
Meanwhile, wage growth in energy and utilities was lackluster, with an uptick in Q4 of just 0.1 percent. The industry had the lowest nominal wage growth in 2017 (1.5 percent). It is joined by arts, entertainment and recreation (1.9 percent) at the bottom of the list for Y/Y growth.
By the way, we’ve expanded the PayScale index to include the transportation and warehousing industry. We’ve also broadened what was called the business and marketing industry to include legal and accounting services and renamed the now more inclusive industry as agencies and consultancies.
Unexpected Job Winners Came from Media and Publishing, Transportation and Manufacturing and Production
Media and publishing jobs saw 1.6 percent Q/Q growth in nominal wages in Q4, outpacing all other jobs by a wide margin. This brings their Y/Y growth rate to 3.9 percent. Manufacturing and production jobs had the next highest Y/Y nominal wage growth at 3.5 percent.
While nominal wages increased across all occupations, art and design (1.9 percent), architecture and engineering (2.1 percent) and marketing & advertising jobs (2.1 percent) had the lowest nominal Y/Y growth rates.
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