Blogging on Employment and Job Markets in US Metro Areas

Real Wage Growth – Low, Mid, & High Wage Industries

The Current Employment Statistics from the BLS provide a wealth of industry-level employment and earnings data, including nominal and real wages. Using low-, mid-, and high-wage industry tiers developed by Jed Kolko, chief economist at Indeed, the graph below shows year-on-year real wage growth since January 2010. (Technical notes: within each tier, the real wage figures are weighted by the number of employed persons for each industry; the below graph shows the year-on-year percent change of the three-month moving average of that weighted average.)

year-on-year real wages growth - low, mid, and high wage industries - 2010 through September 2017

In this graph we can see that since early 2016 low-wage industries have seen higher wage growth than mid- and high-wage industries. As of the latest datapoints, for September 2017, low-wage industries show real year-on-year wage growth of 1.8%, while that of mid- and high-wage industries are 0.8% and 0.9% respectively. While wage growth was roughly equal from mid-2014 though the end of 2015, for the 2010 through 2013 period low-wage industries real wage growth not only lagged that of high-wage industries, but was negative for almost that entire four-year period. High-wage industries saw negative real wage growth only for a brief period from early 2011 through early 2012.

The below graph shows the 12-month moving average of real wages (in effect, rolling annual wages) rebased to January 2010. We can see that low-wage industries saw real wages fall until mid-2013, and recovered to 2010 levels only very recently (in mid-2016). Mid-wage industries recovered to 2010 levels in 2015. High-wage industries, on the other hand, did not see wages dip below the 2010 level at all.

Real wages rebased to January 2010 - low, mid, and high wage industries