Wages Increased 4 Percent in Q2 Says ADP Report

Wages for U.S. workers grew 4.0 percent over the last year, increasing the average wage level by $1.09 to $28.54 an hour, according to the latest ADP Research Institute Workforce Vitality Report (WVR). The growth, accelerating from 3.8 percent to 4.0 percent annual as of June 2019, was driven by strong wage gains for workers in the manufacturing (4.4 percent wage growth, $29.83 hourly wage) and construction (4.4 percent wage growth, $28.65 hourly wage) industries. From the service sector, information (4.2 percent wage growth, $41.56 hourly wage), trade (4.3 percent wage growth, $25.27 hourly wage), which represents 22 percent of the workforce, and  professional and business services (4.1 percent wage growth, $36.45 hourly wage) were the major contributing industries

“The tight labor market is pushing companies to pay more,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “As labor shortages are apparent in most of the sectors, the businesses are holding on to their skilled workers by increasing their wages. Female job holders are capturing larger wage gains than their male counterparts. Since January 2019, female job holders received average wage gains of 5 percent, while men averaged wage gains of 4.6 percent.”

Job switchers in the information industry continued to lead the way with a wage level of $41.08 and growth of 9.7 percent. Job switchers in professional and business services and construction also realized high wage growth of 8.3 and 8.7 percent, respectively. In trade, the largest sector, job holders experienced stronger growth in wages than the workers who switched to the industry, 5.2 percent versus 3.8 percent, but lagged in employment growth with only a mere 0.6 percent annually.