ADP: U.S. Wages Grew 3.0 Percent Over the Past Year, Large Firms Experienced Accelerated Wage Growth

Originally Published by ADP.

Wages for U.S. workers grew 3.0 percent over the last year, increasing the average wage level by $0.80 to $27.46 an hour, according to the ADP Research InstituteWorkforce Vitality Report (WVR) released today. The growth, steady at 3.0 percent annual as of June 2018, was driven by strong wage gains for workers in the professional and business services industry representing almost 17 percent of the workforce (3.4 percent wage growth, $35.04 average hourly wage), in the Northeast (3.5 percent, $30.88) and from large businesses (3.5 percent, $28.50). Employees in the resources and mining industry saw their wages decrease (-3.7 percent, $33.84) and businesses with 500-999 employees experienced the slowest wage growth (1.6 percent, $28.73).


“We’re seeing interesting shifts in labor-market dynamics this quarter,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “Employment growth for new entrants has dipped to -0.1 percent, while it has increased by 4.5 percent for those who are 55 and older. In addition, job switchers who are 55 and older are seeing wage growth of 6.3 percent which is 1.5 percent higher than the prime workforce group who are 35-54. This shift suggests employers are searching far-and-wide for skilled talent and workers who were once sitting on the sidelines have begun to return to the labor market in response.”

Among industries, information continued to lead the way for both wage level and wage growth. In addition to the top overall wage growth number of 5.5 percent, new entrants into the information field had 6.8 percent wage growth. Those who successfully switched positions to the information industry had wage growth of 9.4 percent. Employment in the information industry improved to 1.7 percent.

Job switchers in professional and business services and construction also realized high wage growth of 9.1 and 7.1 percent, respectively. In trade, the largest sector, job holders experienced stronger growth in wages than the workers who switched to the industry, 5.1 percent versus 3.4 percent.

Workers in the Northeast outpaced other regions with 3.5 percent wage growth. Employees who switched jobs to the West experienced 8.6 percent wage growth. Workers in the South had the lowest wage growth at 2.6 percent. By firm size, workers at large firms had the highest wage growth rate at 3.5 percent, with employment growth at 2.2 percent.

The WVR also revealed that more than 20.7 percent of U.S. employees successfully switched firms in the last year. The highest level of switching was from the information industry to the professional and business services industry. Of all the information workers who switched firms, 30 percent switched to the professional and business services industry.

To see detailed workforce vitality components for the second quarter of 2018, including data broken down by region, firm size, industry, gender, and age, visit http://workforcereport.adp.com/. The third quarter 2018 ADP Workforce Vitality Report will be released on Wednesday, October 24, 2018.

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