ADP(R) Workforce Vitality Report Q4 2017 Shows Steady Wage Growth
ROSELAND, NJ–(Marketwired – Jan 17, 2018) – According to the ADP Workforce Vitality Report, overall wage growth increased by 2.0 percent year over year across all industries in the fourth quarter of 2017 and is slightly less than the 2.4 percent growth in wages reported by the U.S. Bureau of Labor Statistics (BLS). The ADP Workforce Vitality Report tracks the same set of workers over time, which provides a more insightful picture of wage growth than overall wage growth. 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 4.3 percent and job switchers’ wages grew slightly less by 3.3 percent year over year in the fourth 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 to job holders, who saw their wages rise by 4.3 percent.
TABLE 1: Annual Wage Growth Q4 2017
|Quarter||Wage Level||YOY Wage Growth|
Considering wages across industries, 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 6.3 percent increase in wages closely followed by information at 6.2 percent. Looking at those who stayed in their jobs, the information industry led the way in wage growth in the fourth quarter where job holders’ wages increased by 5 percent.
“Although employment growth this quarter accelerated from 1.9 to 2.1 percent on an annual basis, wage growth was stagnant for both job holders and job switchers,” said Ahu Yildirmaz, co-head of the ADP Research Institute®. “However, there are two industries, information and professional services, where we see employers paying a premium to attract skilled workers. Additionally, with job switching at an all-time high and continuing to gradually increase we will be watching wages closely in 2018.”
TABLE 2: Q4 2017 Annual Wage Growth by Industry
|Industry||Wage Level Full-Time||YOY Wage Growth
|Yearly Employment Growth|
|Resources and Mining||$42.75||$31.44||4.7%||-0.5%||11.1%|
|Finance and Real Estate||$37.83||$34.25||4.4%||3.6%||1.6%|
|Professional and Business Services||$40.53||$39.59||4.3%||5.8%||2.9%|
|Leisure and Hospitality||$26.68||$25.23||4.7%||6.3%||2.5%|
|Education and Health Services||$31.48||$30.96||3.8%||5.8%||2.7%|
|Trade, Transportation, and Utilities||$31.08||$29.90||4.2%||4.9%||0.8%|
Looking at labor market dynamics across all regions there is some variability. The average wage level for job holders in the Midwest is the lowest of all four regions with a rate of $27.40 per hour. This could be due to the weak goods-sector and relative cost of living in this area. West continues to lead with highest employment growth, wage growth and wage level.
TABLE 3: Q4 2017 Annual Growth by Region
To summarize the trends across a variety of dimensions; the strongest wage growth can be found in the West, the leisure & hospitality industry, among women and younger workers, workers with little job tenure and those employed in large companies.
TABLE 4: Who Fared the Best in Fourth Quarter: Annual Wage Growth for Job Holders
|Age||24 and younger||8.6%|
|Tenure||Less than 3 years||5.3%|
|Industry||Leisure & Hospitality||4.9%|
The1st Quarter 2018 ADP Workforce Vitality Report will be released on Wednesday, April 18, 2018.
About the ADP Workforce Vitality Report
The ADP Workforce Vitality Report was developed by the ADP Research Institute in collaboration with Moody’s Analytics. It is an unprecedented, in-depth quarterly analysis 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 turnover, 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. For more information about the report, please visit http://workforcereport.adp.com/.
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