Last month, we examined the growth in employment of high, middle, and low wage industries in a blog article based on local analysis of a USA Today article. While high-wage industries grew more than others from 2017Q1-2018Q1, have wages in these industries increased, as well?
We found that wage growth follows a different pattern than employment growth with recent wage gains in low-wage industries, but longer-term wage gains in high-wage industries.
Recent changes
To analyze wage growth, we did two things differently:
- We base the analysis on Average Weekly Wage. The industries themselves will remain in the same categories, even if the category demarcation points will not be as rounded ($35,000/52=$673.08/week, $65,000/52=$1,250/week).
- We inflation-adjust wages to 2018Q1 $ based on the Consumer Price Index (CPI).
To understand change between high-, middle-, and low-wage industries, below is a chart with industry, 2017Q1 average weekly wage, 2018Q1 average weekly wage, and its category:
|
NAICS Code |
Industry |
2017Q1 Average Weekly Wage* |
2018Q1 Average Weekly Wage |
% Difference |
Wage Level |
|
55 |
Management of Companies |
$2,885 |
$2,858 |
-0.9% |
High |
|
52 |
Finance & Insurance |
$2,518 |
$2,609 |
3.6% |
High |
|
22 |
Utilities |
$2,232 |
$2,202 |
-1.4% |
High |
|
51 |
Information |
$1,787 |
$1,822 |
2.0% |
High |
|
54 |
Professional, Scientific, & Technical Services |
$1,565 |
$1,563 |
-0.1% |
High |
|
42 |
Wholesale Trade |
$1,489 |
$1,487 |
-0.1% |
High |
|
21 |
Mining |
$1,418 |
$1,233 |
-13.0% |
Middle |
|
31 |
Manufacturing |
$1,212 |
$1,219 |
0.6% |
Middle |
|
53 |
Real Estate & Rental and Leasing |
$999 |
$1,012 |
1.3% |
Middle |
|
23 |
Construction |
$1,001 |
$1,000 |
-0.1% |
Middle |
|
48 |
Transportation & Warehousing |
$950 |
$986 |
3.7% |
Middle |
|
62 |
Health Care & Social Assistance |
$950 |
$956 |
0.7% |
Middle |
|
92 |
Public Administration |
$942 |
$937 |
-0.5% |
Middle |
|
61 |
Educational Services |
$856 |
$869 |
1.5% |
Middle |
|
56 |
Administrative & Support |
$709 |
$712 |
0.4% |
Middle |
|
11 |
Agriculture, Forestry, Fishing & Hunting |
$684 |
$688 |
0.6% |
Middle |
|
81 |
Other Services (exc. Public Administration) |
$663 |
$667 |
0.6% |
Low |
|
71 |
Arts, Entertainment, & Recreation |
$632 |
$600 |
-5.0% |
Low |
|
44 |
Retail Trade |
$551 |
$548 |
-0.7% |
Low |
|
72 |
Accommodation & Food Services |
$332 |
$332 |
0.1% |
Low |
Over the previous year, while most high-wage industries generally had flat or declining wages, average wages went up in the category by 0.9% on the strength of wage growth in Finance & Insurance and Information. Middle-wage industries generally had increasing wages, and average wages went up in the category by 0.8%. Seven of the 10 middle-wage industries had wage growth, with only Mining, Public Administration, and Construction offering lower wages in 2018 than 2017. Average wages across the low-wage industries declined by 0.7%. We found mixed results amongst the low-wage industries: two (Accommodation & Food Services; Other Services) had higher wages while two (Arts, Entertainment, & Recreation; Retail Trade) had lower wages.
Are recent changes reflective of the larger pattern since the start of the recession or century?
Mostly- but accentuated even further. High-wage industries generally saw clear percentage wage gains while middle-wage industries showed more modest wage gains and low-wage industries overall showed a modest decline.
| NAICS Code | Industry | 2000Q1 Average Weekly Wage* | % Diff. from 2000Q1 to 2018Q1 | 2008Q1 Average Weekly Wage* | % Diff. from 2008Q1 to 2018Q1 | 2018Q1 Average Weekly Wage | Wage Level |
| 55 | Management of Companies | $1,717 | 66.4% | $2,468 | 15.8% | $2,858 | High |
| 52 | Finance & Insurance | $1,663 | 56.9% | $2,104 | 24.0% | $2,609 | High |
| 22 | Utilities | $1,856 | 18.6% | $1,880 | 17.1% | $2,202 | High |
| 51 | Information | $1,031 | 76.7% | $1,438 | 26.7% | $1,822 | High |
| 54 | Professional, Scientific, & Technical Services | $1,250 | 25.0% | $1,318 | 18.6% | $1,563 | High |
| 42 | Wholesale Trade | $1,167 | 27.4% | $1,294 | 14.9% | $1,487 | High |
| 21 | Mining | -- | -- | $1,276 | -3.3% | $1,233 | Middle |
| 31 | Manufacturing | $1,051 | 15.9% | $1,129 | 8.0% | $1,219 | Middle |
| 53 | Real Estate & Rental and Leasing | $748 | 35.3% | $836 | 21.1% | $1,012 | Middle |
| 23 | Construction | $803 | 24.5% | $850 | 17.6% | $1,000 | Middle |
| 48 | Transportation & Warehousing | $977 | 0.9% | $919 | 7.2% | $986 | Middle |
| 62 | Health Care & Social Assistance | $821 | 16.4% | $850 | 12.4% | $956 | Middle |
| 92 | Public Administration | $869 | 7.9% | $918 | 2.1% | $937 | Middle |
| 61 | Educational Services | $806 | 7.8% | $844 | 2.9% | $869 | Middle |
| 56 | Administrative & Support | $527 | 35.0% | $624 | 14.0% | $712 | Middle |
| 11 | Agriculture, Forestry, Fishing & Hunting | $602 | 14.2% | $648 | 6.3% | $688 | Middle |
| 81 | Other Services (exc. Public Administration) | $581 | 14.9% | $571 | 16.9% | $667 | Low |
| 71 | Arts, Entertainment, & Recreation | $652 | -7.9% | $669 | -10.2% | $600 | Low |
| 44 | Retail Trade | $566 | -3.2% | $542 | 1.0% | $548 | Low |
| 72 | Accommodation & Food Services | $317 | 4.8% | $308 | 8.1% | $332 | Low |
When comparing recent wages with wages from 2000, we see only one industry among the high-wage industries that has gained less than 20%. Meanwhile, none of the low-wage industries show even a 15% gain. Likewise, comparing recent wages with 2008, most of the low-wage industries have not gained even 15%. In contrast, few of the middle-wage and almost all high-wage industries have gained at least 15% in wages. The chart above clearly shows how the general average wage measures within each category differ. High-wage industries (+40.3%) show higher wage growth than middle-wage industries (+10.5%). Middle-wage industries show higher average wage growth than low-wage industries, which are declining (-2.6%).
What does this mean?
These findings reinforce some of the changes we’ve shown in wages. For instance, when looking at firms rather than industries as the unit of analysis, high-paying firms show greater wage growth than lower paying firms.
The short-term growth in wages for middle-wage and even some low wage industries may be at least partly due to a tight labor market. Firms will offer higher wages as enticements for employment when they can’t find workers. For instance, Transportation/Warehousing sees wage growth across many of its sectors, like Air Transportation, Truck Transportation, Support Activities, and Warehousing & Storage, though this is making up for lost ground from industry wages from 2000. Another story of note from middle-wage industries is that legislation in the past few years may have influenced wage growth in Educational Services, in addition to other factors like local supplements in higher-paying urban markets.
The longer-term growth in wages appears to go to these higher-paying firms, particularly in Finance & Insurance and Information (which is driven in particular by Software Publishing). These industries in North Carolina continue to grow and thrive, particularly in the Charlotte and the Triangle regions.