U.S. Wage Growth Remained at 3.2 Percent for Fourth Quarter 2019

Wages for U.S. workers grew 3.2 percent over the last year, increasing the average wage level by $0.88 to $28.93 an hour, according to the ADP Research Institute Workforce Vitality Report (WVR). The wage growth of 3.2 percent corresponds to the Bureau of Labor and Statistics (BLS) numbers of 2.9 percent which was published this month.

Earlier this year, job holders, job switchers, and entrants saw wage growth of 5 percent or better; however, job holders are now seeing only 4.6 percent growth, entrants stand at 4.9 percent, and switchers came in at 5 percent.

Wage growth across industries had been tightly clustered between 3.5 percent and 4.5 percent; however, the differences are becoming clearer. Resources and mining continues to be the weakest performer, with wages falling year-over-year. Education and health services also experienced low wage growth at 1.8 percent, less than half the rate from one year ago. However, job holder wage growth in education and health services remains above 4 percent and employment growth is among the strongest of any industry, indicating that overall wage growth is likely being weighed down by changes in industry worker composition.

Workers in the Midwest outpaced other regions with 3.9 percent wage growth, although the hourly wage rate was the lowest at $27. The Midwest also experienced the lowest employment growth at 0.8 percent. Job switchers fared best in the West experiencing a wage growth of 6.7 percent, while job entrants in the Northeast fared the best with wage growth of 6.2 percent. By firm size, workers at large firms had the highest wage growth rate at 3.4 percent, with employment growth at 3 percent.