U.S. wage growth remains steady; job switching continues to slow, ADP report says

U.S. workers wages grew 3.4 percent over 2018, increasing the average wage level by $0.93 to $28.06 an hour, according to Roseland-based ADP Research Institute’s Workforce Vitality Report released Wednesday.

The growth, the report said, was due to strong wage gains in the education and health services industry, which represents 18 percent of the workforce (4.1 percent wage growth, $27.05 average hourly wage) and trade, which represents 22 percent of the workforce (4.4 percent, $24.56).

The Northeast (3.7 percent, $31.57) and large businesses (4.9 percent, $29.04) also helped.

Decreases in wage growth were seen in the resources and mining industry (-0.2 percent, $35.25) and businesses with less than 50 employees (2 percent, $26.06).

“As the labor market sits at full employment, we continue to see an overall slowdown in job switching across the majority of industries,” Ahu Yildirmaz, co-head of the ADP Research Institute, said.  “One industry defying the market trend is finance, which has experienced a steady uptick in job switching.  This acceleration is driven primarily by younger workers.”

Among industries, information led the way in both wage level and wage growth (5.1 percent). The report said those who successfully switched into the information industry had a wage growth of 10.6 percent. Employment in the information industry also jumped by 2.9 percent.

Job switchers in professional and business services and construction also experienced high wage growth (8.2 and 9 percent, respectively).

In the trade sector, job holders had stronger wage growth than workers who switched into the industry (5.3 percent vs. 3.8 percent).

Workers from the West and Northeast outpaced the other two regions with 3.7 percent wage growth, with the West having the highest growth at 2.7 percent. Job switchers in the West fared the best, with a wage growth of 7.7 percent. Workers in the South had the lowest wage growth (3 percent) and the Midwest had the worst employment growth (0.9 percent).

The report said 20.5 percent of employees successfully switched firms in 2018. ADP said this highlights an overall slow in job switching. However, job switching in the finance sector is up, with more than 18.6 percent of workers switching firms last year.