U.S. Wage Growth Reaches Post-Recession High
November 21, 2016 •
The Wage Growth Tracker developed by the Federal Reserve Bank of Atlanta indicates that the median U.S. worker saw pay rise by 3.9% year-over-year in October, the fastest rate of growth since November 2008.
The Atlanta Fed’s Wage Growth Tracker is a measure of the nominal wage growth of individuals. It is constructed using information from the Current Population Survey (CPS), and is the median annual percentage change in the hourly wage of individuals (i.e., their wages as observed 12 months apart).
As might be expected, wage changes are not uniform across all groups. As shown in Figure 1, the median change in wages for all workers has risen from a low point in 2010, when median wages were rising at a rate of approximately 1.5-2.0%, to the current rate of nearly 4.0%. Additionally, Figure 1 suggests that college graduates typically saw a slightly larger increase in their wages than did the workforce at large, although this advantage has largely vanished during the past year or so.
The Atlanta Fed’s analysis also suggests that changing jobs results in higher median wage growth.
Figure 2 shows median wage increase for workers who stayed in their jobs versus workers who changed jobs. The wage growth for job switchers was lower than that for workers who stayed in their jobs during the recession and its aftermath, but since September 2010, job switchers have enjoyed a substantial bump in their compensation versus those who stayed put.
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Contact ACA’s Allen Irish for more information.