U.S. Wages Up 2.8% Year Over Year; Glassdoor Launches Local Pay Reports


November 1, 2016

Today I’m happy to announce Glassdoor Economic Research is launching a new data product, Glassdoor Local Pay Reports, to provide real-time insights into wage trends in local markets around the country. The reports incorporate millions of salaries collected on Glassdoor from U.S. workers and apply a proprietary machine learning algorithm to estimate trends in local pay.

Beyond overall wage growth across the U.S. and five major metros, the Glassdoor Local Pay Reports examine salary trends in Glassdoor data at the specific job title level for more than 60 jobs in more than 15 job categories. The October 2016 reports show three consistent themes across all five metros: data science wages flatlining, booming salaries for certain key health care jobs, and a mixed bag of both sluggish and robust wage growth in blue-collar jobs.

San Francisco Salaries Outpacing U.S. Average

The October 2016 Local Pay Reports reveal median base pay rose 2.8 percent overall for the U.S to $51,404. Currently available in five metros, the Local Pay Reports show the fastest median salary growth was in San Francisco at 4.2 percent to $65,927 — well above the U.S. average of 2.8 percent. San Francisco is followed by healthy wage growth in Los Angeles (3.9 percent growth to $58,827 median base pay), New York City (3.9 percent, $60,365), Chicago (2.8 percent, $55,864). Houston’s wages are growing slowly, below the U.S. average at 1.6 percent to $54,462.

Overall, booming tech and professional services employment in the San Francisco Bay Area largely explains that metro’s rapid pay growth. Similar booms in tech and professional services are fueling pay growth in New York City and Los Angeles, as well as strong growth in some blue-collar fields. By contrast, the Houston metro has been adversely affected by falling oil prices this year, causing below-average wage growth.

U.S. Median Base Pay According to Glassdoor Salaries

2016-10-31_21-23-00

Note: 3-month moving average trend in median base pay at the overall U.S. level. Source: Glassdoor Economic Research (glassdoor.com/research)

Data Science Wages Flat

One surprising finding from the October report is that although data science is a fast-growing field in terms of new jobs added, growth in median base pay has been flat or declining over the past year. In October, median data science base salaries fell by 0.2 percent to $97,724 for the U.S. overall. Among metros, data science pay grew between 1.2 percent (Los Angeles) to as low as -2.0 percent (Houston).

Why are salaries flat in data science? The main reason is the changing definition of the job title of “data scientist” in recent years. Previously this role was dominated by Ph.D.-trained experts who commanded top salaries. Today, more employers are hiring data scientist job titles at a somewhat lower skill level, bringing down average pay. This evolution of the data science role in many companies likely explains the gradual downward drift in pay growth we see in Glassdoor data.

Booming Health Care

Health care has been a fast-growing industry for years, with pervasive skill shortages for many roles. Strong demand for certain key health care workers is evident in Glassdoor data as well. Specifically, three health care jobs saw exceptional pay growth in October: Registered nurse, pharmacy technician, and medical assistants. Salaries for all three roles are growing well above average in all five metros.

For example, median base pay for medical assistants grew by 6.3 percent for the U.S. overall in October, and 7.8 percent year over year in Los Angeles to $38,160. Similarly, median base pay for pharmacy technicians grew by 4.4 percent for the U.S. overall, but as high as 5.8 percent year over year in Los Angeles ($36,987 median base pay).

By contrast, not all health care jobs having booming wages. Physical therapists are experiencing average wage losses of -2.3 percent overall for the U.S. in October. By metro, Glassdoor data show median base pay for physical therapists fell by between -0.9 percent in Los Angeles and -4.0 percent in Houston year over year in October.  

Slow Manufacturing, Strong Warehousing

Finally, while manufacturing wages are sluggish, not all blue-collar jobs are experiencing wage stagnation.

For manufacturing, we see sluggish growth in median base pay for two core job titles: production manager and manufacturing engineer. For the U.S. overall, pay for these two roles grew by 0.9 percent and 1.0 percent, respectively. However, wages for both roles are declining year over year in Houston (-0.9 percent and -0.8 percent, respectively), and growing slowly in Los Angeles (2.3 percent and 2.4 percent, respectively). This slow manufacturing pay growth in Glassdoor data likely reflects the overall slowdown in U.S. manufacturing hiring in recent years.

By contrast, Glassdoor data show several blue-collar job titles are experiencing robust wage growth today. Warehouse associate, truck driver, and machine operators are all experiencing year over year growth in median base pay that is well above the U.S. average.

For example, warehouse associates are experiencing 7.7 percent year over year gains to $44,920 in median base pay for the U.S. overall, and between 5.8 percent in Houston and 9.2 percent in Los Angeles. Similarly, truck drivers in October experienced year-over-year gains of 7.8 percent for the U.S. overall, and between 5.8 percent in Houston and 9.3 percent in Los Angeles.

This trend likely reflects booming demand for these roles thanks to rapid growth of online retailers such as Amazon, Walmart and others who rely heavily on warehouse and trucking to fuel their U.S. supply chains.

 

glassdoor_highlights_localpayreport_oct16

Intro to the Local Pay Reports

Glassdoor’s Local Pay Reports provide a detailed look at trending wage data at the local market level for specific types of jobs. Currently, Local Pay Reports are available in five major metros: Chicago, Houston, Los Angeles, New York City and San Francisco.

Building on sophisticated data science used in Glassdoor’s new Know Your Worth product, the reports apply a proprietary machine learning algorithm to estimate trends in pay based on millions of Glassdoor salary reports.

The Local Pay Reports estimate year-over-year growth in estimated median base salaries by job title for more than 60 jobs across more than 15 job categories including education, technology, retail and more. The reports also estimate median base pay by industry and employer size, and provide a monthly trend of metro-level median base pay for each local market over the past four years.

Our new Local Pay Reports fill an important gap in our knowledge about wage growth at the local level for specific jobs. Official BLS “Occupational Employment Statistics” are updated only once per year, and use broad occupational groupings that can be confusing for job seekers. Local Pay Reports will be released monthly—using the latest data from Glassdoor—and show pay for actual job titles that are easy for non-economists to understand.

To learn more about the Local Pay Reports and the methodology, or subscribe to the monthly email alerts, visit: https://www.glassdoor.com/research/.

Download the October 2016 Glassdoor Local Pay Reports here.

 

A Note on Accuracy of the Local Pay Reports

To help verify the accuracy of the Local Pay Reports, we examined the “median error” of our underlying salary estimates model when tested on samples of known Glassdoor salary data by job title. In those test samples, the model displayed a median error of 10.2 percent, which means that half of the estimates from our model were accurate to within 10.2 percent, while the other half had errors above 10.2 percent.

Additionally, we examined what percentage of Glassdoor salary reports our model was able to accurately predict to within different levels of error. At the time the model was developed, it predicted 75.3 percent of Glassdoor salaries accurately to within 20 percent of the actual reported pay, 49.1 percent of salaries to within 10 percent of actual reported pay, and 27.2 percent of salaries to within 5 percent of actual reported pay.   

Estimated Accuracy of Salary Estimates Underlying the Local Pay Report

(by Job Title)

Within 5% Within

10%

Within 20% Median Error
Model Performance 27.2% 49.1% 75.3% 10.2%

Source: Glassdoor Economic Research (glassdoor.com/research)

Monthly Jobs Report Predictions & Interviews:

Beyond the Local Pay Reports, find my predictions about this month’s jobs report from BLS: https://www.glassdoor.com/research/oct-2016-jobs-report

To speak with me about wage growth, the Local Pay Reports or the monthly jobs report, contact pr@glassdoor.com.