If you were in business during the recession of 2008, you may remember how much of an impact the downturn in the economy had. You or someone you know may have been laid off. You may have seen a hiring freeze. Your company may have had big plans that failed or were cut back as consumers curbed spending.
The economy has been steadily improving since unemployment peaked at 10% in October 2009. In July 2017, unemployment stood at 4.3% and 209,000 jobs were added. The recent years of low unemployment and economic growth has made hiring harder. In a growing economy, employers need to continually increase employee pay to keep up with inflation and keep employees on the job. Wage growth is also reflective of growth in corporate profits, and it contributes to the economy by giving workers more spending power. When wage growth slows, economists take notice.
July 2017 Local Pay Reports from Glassdoor Economic Research revealed that in the U.S.. median base pay is up 1.2% YOY to $51,120, down from 1.5% last month. This July marks the slowest pace of wage growth in three years, revealing a continued slowing trend for the average American paycheck. Though wages are still increasing, it’s worth noting where they are slowing the most, and for which jobs.
In 7 of the 10 markets measured by Glassdoor Local Pay Reports, pay growth slowed. In Boston,Philadelphia andWashington, D.C., wage growth ticked up only slightly. Check the report for your city to find out the health of your locale.
The jobs that showed declines in pay were middle class jobs such as Financial advisors (down -1.4 percent to $52,394) office managers (down -0.5 percent to $45,790) and buyers (down -0.5 percent to $57,299).
“Some of this weakness in pay growth can be attributed to automation, which is beginning to affect jobs that pay right around the median wage in the U.S., which are typical middle-class wages. For example, loan officers are not as in demand when consumers can apply for and complete a loan instantly online, and the office manager role changes when businesses utilize software and self-service kiosks for their employees and visitors,” said Andrew Chamberlain, Glassdoor Chief Economist.
Jobs which showed the fastest pay gains indicate areas of growth in the economy. In July 2017, jobs with significant YOY pay increases included recruiters, with an average increase of 6.5% to $51,050. With the economy near full employment, employers are relying more on passive job candidates, putting recruiters in high demand.
Wage growth for baristas and restaurant cooks was also well above the national average, likely reflecting several state and local minimum wage increases that went into in 2017. In addition, there were rapid pay gains for jobs that are helping fuel the supply chain of today’s fast-growing online retailers: warehouse associates, delivery drivers and truck drivers. Finally, construction laborers saw wages rise at a strong 3.7 percent year-over-year in July, likely reflecting strong demand in the housing sector this summer.
A quick comparison of wage growth for key roles in your city versus the national average can give you an idea of the trend in your area. Competition for talent is still tight, and the economy is still growing, but with July’s 1.2 percent year-over-year pay growth at less than half of the 3.1 percent pace recorded in January, it’s worth keeping an eye on wage trends to make sure your wages are in line with—or competitively ahead of—the market.