U.S. workers’ wages increased 4.4% in the fourth quarter of 2020 — with wage growth for both job holders and job switchers hitting all-time highs of 5.9% and 8%, respectively, according to Roseland-based ADP Research Institute’s Workforce Vitality Report released Wednesday.
In fact, wage growth for Generation Z (24 years old and younger) job holders saw the largest wage gains in December 2021, at 13.1%. Employment growth increased by 5% in December 2021.
Across all age groups, wage growth was strongest among workers 24 years old and younger, at 6.8% in December 2021. In contrast, workers over 55 saw wage gains at just 2.7%. Wage gains for females outpaced male wages in December 2021, albeit from a lower base.
“ADP data showed U.S. wage growth increased 4.4% on average for all workers in December 2021, with job switchers and younger job holders who saw the largest wage growth,” said Nela Richardson, chief economist, ADP. “Leisure and hospitality, which experienced the greatest job loss due to the pandemic, was a notable exception to this overall trend. While leisure and hospitality led employment gains in the first half of 2021, it is the only industry where job switchers’ wages were basically flat on average in December 2021 compared to previous year.”
Employment growth year-over-year increased 5%, with all sectors experiencing employment growth. While leisure and hospitality led the way with a 17.7% increase, overall employment levels for the sector remain below their high-water mark prior to the pandemic. However, wage growth for job holders and job switchers was the strongest in industries including professional business services (12.2%) and information technology (12.2%).
Across the U.S., all regions experienced wage growth over 3%. While job switchers saw record-setting wage growth, job switchers in the West and Northeast received the biggest gains, at 9.2% and 9%. By firm size, midsized companies with 500 to 999 employees increased wages the fastest, up 9.1% in December 2021 from one year prior.
Wage gains for job switchers saw tremendous increases overall, with double-digit increases for job switchers in industries including finance, information technology and professional business services, with an average wage of $18.04 for females and $19.66 for males.