Wage growth rises in Q3, but less than BLS reported, ADP says

By Lynda Cohen
Roseland | Oct 18, 2017 at 12:24 pm

Overall wage growth nationwide increased by 1.7 percent across all industries in the third quarter, according to the ADP Workforce Vitality Report.

That is nearly one full percentage point below the 2.6 percent growth in wages reported by the U.S. Bureau of Labor Statistics.

Roseland-based ADP says its report gives a more insightful picture because it tracks the same set of workers over time.

This set of workers includes job holders, who stayed in their same job for at least one year, and those who changed jobs, referred to as job switchers.

Job holders’ wages grew by 4.4 percent and job switchers’ wages grew slightly less, by 3.3 percent year over year in the third quarter.

On average, job holders’ hourly wage levels were $10 more than that of job switchers. Tracking full-time workers alone, job switchers increased their wages by an average of 4.9 percent when compared with job holders, who saw their wages rise by 4.3 percent.

The service sector proved to be more attractive for job switchers than the goods sector. Across most service industries, job switchers’ wage growth exceeded that of job holders’.

Full-time workers who switched jobs to the leisure and hospitality industry gained the most, with a 6.9 percent increase in wages. Looking at those who stayed in their jobs, the information industry led the way in wage growth in the third quarter, with job holders’ wages increasing by 5.1 percent.

“Despite the deceleration we’ve been experiencing in overall wage growth, we continue to see evidence of the strengthening labor market when you look at specific areas,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “As employers strive to retain skilled workers, we see wage increases for full-time job holders in all sectors. Most notable are the information and construction industries.”

The average wage level for job holders in the Midwest is the lowest of all four regions, with a rate of $27.14 per hour. This could be due to the weak goods-sector and relative cost of living in this area.

Additionally, although the South has the lowest wage growth, it also has the highest employment growth, which reflects the recent pattern of above-average economic growth the region experienced prior to hurricanes Harvey and Irma.

Lynda Cohen | lcohen@roi-nj.com | LyndaCohen