ROSELAND, N.J., Jan. 27, 2021 /PRNewswire/ -- Wages for U.S.
workers grew 4.4 percent over the last year, increasing the average
wage level by $1.27 to $30.19 an hour, while employment growth
demonstrated a continued downward slide by -7.9 percent according
to the ADP Research Institute® Workforce Vitality
Report (WVR) released today. The average wage growth is
higher than expected as a result of significant job losses among
low wage earners, which increased the average. However, higher
income groups experienced flat wage growth compared to lower income
groups, as most of the job losses came from low wage jobs.
"The headline wage number masks the turbulence in the job market
caused by COVID-19," said Nela
Richardson, chief economist, ADP. "When you look deeper at
the data, it shows that the significant job losses we've seen in
the lower income positions has inflated the overall average wage
growth. For that reason, it looks like wages are growing at a
healthy clip, when for the majority of workers, wages were either
mostly flat or barely growing above inflation at year-end."
"Additionally, even prior to the pandemic, wages by gender
showed disparity among males and females, and that wage inequality
widens as they progress in their careers, with males in the lead.
For job holders who kept the same job through the 2020 pandemic,
female workers made $8 less than male
workers in December."
Employment growth year-over-year continued a downward slide with
-7.9 percent due to COVID-19. Leisure and hospitality was the
hardest hit industry with a decline in employment growth by nearly
24 percent. Finance industry employment growth fared the best among
all industries with a drop of 1 percent. Across industries, the
overall wage growth slowed compared to the initial months of the
pandemic. Additionally, job-holders' wage growth also slowed,
likely due to wage freezes or job cuts as a result of the
pandemic.
Table 1: Wage and Employment Growth by Industry –
December 2020
Industry
|
Wages
|
YOY Wage
Growth
|
Yearly
Growth
|
All
|
Holders
|
Entrants
|
Switchers
|
Employment
Growth
|
Switching
Rate
|
-ALL-
|
$30.19
|
4.4%
|
4.0%
|
7.1%
|
5.0%
|
-7.9%
|
19.0%
|
Goods
|
|
|
|
|
|
|
|
Construction
|
$30.31
|
2.9%
|
3.9%
|
8.0%
|
5.4%
|
-2.9%
|
12.9%
|
Manufacturing
|
$31.47
|
3.8%
|
3.8%
|
6.0%
|
5.2%
|
-4.7%
|
16.4%
|
Resources and
Mining
|
$40.23
|
16.0%
|
2.3%
|
0.0%
|
13.9%
|
-10.2%
|
7.1%
|
Services
|
|
|
|
|
|
|
|
Information
|
$42.22
|
0.6%
|
3.4%
|
6.8%
|
8.9%
|
-9.8%
|
17.1%
|
Finance and Real
Estate
|
$35.57
|
3.6%
|
4.2%
|
13.4%
|
5.5%
|
-0.8%
|
14.6%
|
Professional and
Business Services
|
$37.99
|
3.6%
|
3.3%
|
7.4%
|
8.0%
|
-6.8%
|
22.1%
|
Education and Health
Services
|
$28.68
|
4.1%
|
3.5%
|
6.4%
|
4.2%
|
-4.6%
|
18.3%
|
Leisure and
Hospitality
|
$18.98
|
4.9%
|
5.9%
|
5.0%
|
-1.3%
|
-23.8%
|
20.7%
|
Trade,
Transportation, and Utilities
|
$25.76
|
1.5%
|
4.0%
|
7.6%
|
1.7%
|
-6.3%
|
22.4%
|
Although wage growth was strong across all regions, the
Northeast suffered the worst employment growth of -10.5 percent.
Job holders did best in the West, experiencing a wage growth of 4.3
percent, while job entrants in the Northeast and Midwest fared the
best with wage growth of 8.7 percent each. By firm size, workers at
the largest firms (1,000+) had the highest wage growth rate at 5.2
percent, while small firms experienced the worst employment growth
at -9.7 percent.
Table 2: Wage and Employment Growth by Region and Firm
Size – December 2020
Region
|
Wages
|
YOY Wage
Growth
|
Yearly
Growth
|
All
|
Holders
|
Entrants
|
Switchers
|
Employment
Growth
|
Switching
Rate
|
-USA-
|
$30.19
|
4.4%
|
4.0%
|
7.1%
|
5.0%
|
-7.9%
|
19.0%
|
MIDWEST
|
$28.16
|
4.3%
|
3.9%
|
8.7%
|
2.6%
|
-8.3%
|
17.8%
|
NORTHEAST
|
$34.30
|
5.8%
|
4.0%
|
8.7%
|
6.7%
|
-10.5%
|
20.0%
|
SOUTH
|
$27.94
|
3.5%
|
3.7%
|
7.6%
|
4.6%
|
-6.1%
|
19.3%
|
WEST
|
$32.52
|
4.4%
|
4.3%
|
5.2%
|
6.3%
|
-8.1%
|
18.9%
|
Company
Size
|
|
|
|
|
|
|
|
-ALL-
|
$30.19
|
4.4%
|
4.0%
|
7.1%
|
5.0%
|
-7.9%
|
19.0%
|
49 or less
|
$27.71
|
3.7%
|
4.1%
|
7.1%
|
4.8%
|
-9.7%
|
13.8%
|
50 to 499
|
$30.26
|
4.1%
|
3.7%
|
5.6%
|
4.9%
|
-7.9%
|
20.4%
|
500 to 999
|
$30.93
|
3.0%
|
4.0%
|
5.2%
|
2.0%
|
-6.8%
|
18.9%
|
1000 or
more
|
$31.56
|
5.2%
|
4.1%
|
7.5%
|
5.7%
|
-6.8%
|
21.7%
|
The difference in hourly wages between the lowest income groups
making less than $20K annually and
the income group making between $20K–$50K annually is $5.27. That difference in hourly wages increases
to $10.37 between the next income
group (i.e. those making between $20K–$50K annually and $50K–$75K
annually). However, the highest income group ($75K+ annually) earns
more than twice that of next lower group ($50K–$75K annually).
While wage disparity widens as income levels increase, the higher
income groups experienced flat wage growth in the past year
compared to lower income groups, as most of the job losses came
from low wage jobs. The remaining jobs in the low-income group
consequently improved their average hourly wage in relation to last
year, resulting in the elevated average wage growth.
Table 3: Wages by Income Group – December 2020
Income
Group
|
<$20K
|
$20K -
$50K
|
$50K -
$75K
|
$75K+
|
Hourly
Wage
|
$11.93
|
$17.20
|
$27.57
|
$59.44
|
Wage
Growth
|
6.2%
|
1.9%
|
-0.4%
|
0.1%
|
Employment
Share
|
22.6%
|
37.7%
|
17.6%
|
22.2%
|
|
|
|
|
|
Job entrants earn similar wages by gender, with males earning
$1.29 per hour more than women.
However, the wage gap widens as they progress through their career.
In fact, female holders and switchers earn about $7 less per hour than their male
counterparts.
Table 4: Wages by Gender – December
2020
Hourly
Wages
|
All
|
Holders
|
Switchers
|
Entrants
|
Female
|
$26.45
|
$29.02
|
$26.94
|
$13.29
|
Male
|
$33.31
|
$36.92
|
$33.66
|
$14.58
|
Wage
Growth
|
|
|
|
|
Female
|
5.3%
|
4.4%
|
5.7%
|
6.9%
|
Male
|
3.7%
|
3.7%
|
4.7%
|
7.3%
|
About the ADP Workforce Vitality Report
The ADP Workforce Vitality Report (WVR) was developed
by the ADP Research Institute. It is an unprecedented, in-depth
monthly analysis (published quarterly) of the vitality of the U.S.
labor market based on actual data that identifies labor market
trends and dynamics across multiple dimensions. These
dimensions include employment growth, job switching, wage growth
and hours worked. In addition to the macro data presented in
the report, there are also segment-specific findings by industry,
state, gender, age, experience, and pay level. Established in
October 2014, the report methodology
was updated in April 2018 utilizing
monthly data to include additional data points and deeper
insights. For more information about the report, please visit
http://workforcereport.adp.com/.
Type of Workforce
Holders: Workers who were employed by the same company for the
past 12 months. The wage growth is the rate of change in
wages in that time period.
Switchers: Workers who changed employers between consecutive
months. The wage growth is calculated from the 12 month
moving average of wage growth.
Entrants: First time workers who are less than 25 years
old. The wage growth is calculated from the 12- month moving
average of wages.
To see detailed results from the ADP Workforce Vitality
Report for December 2020,
including data broken down by region, firm size, industry, gender,
and age visit http://workforcereport.adp.com/. The first
quarter 2021 ADP Workforce Vitality Report will be released
on Wednesday, April 28, 2021.
About the ADP Research Institute
The mission of the
ADP Research Institute is to generate data-driven discoveries about
the world of work, and to derive reliable economic indicators from
these insights. We offer these findings to the world at large as
our unique contribution to making the world of work better and more
productive, and to bring greater awareness to the economy at
large.
About ADP (NASDAQ-ADP)
Designing better ways to work through cutting-edge products,
premium services and exceptional experiences that enable people to
reach their full potential. HR, Talent, Time Management,
Benefits and Payroll. Informed by data and designed for
people. Learn more at ADP.com.
ADP, the ADP logo, Always Designing for People and ADP
Research Institute are registered trademarks of ADP, Inc.
All other marks are the property of their respective
owners.
Copyright © 2021 ADP, Inc.
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SOURCE ADP, Inc.