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ROSELAND, NJ -- (Marketwired) -- 07/19/17 -- According to the ADP Workforce Vitality Report, overall wage growth increased by 2.3 percent year over year across all industries in the second quarter of 2017 and is higher than the 1.8 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 4.4 percent and job switchers' wages grew slightly less by 3.4 percent year over year in the second quarter. On average, job holders' hourly wage levels were
TABLE 1: Annual Wage Growth Q2 2017
| Quarter | Wage Level | YOY Wage Growth | |||||
| Holders | Switchers | Holders | Switchers | ||||
| Q3 2016 | 4.3% | 3.6% | |||||
| Q4 2016 | 4.3% | 3.7% | |||||
| Q1 2017 | 4.3% | 3.6% | |||||
| Q2 2017 | 4.4% | 3.4% | |||||
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. The information industry led the way in wage growth in the second quarter where job holders wages increased by 5.2 percent. Meanwhile, full-time workers who switched jobs to the leisure and hospitality industry gained the most with a 6.7 percent increase in wages.
"In the second quarter, job holders experienced a slight acceleration in wage growth on a yearly basis across most industries," said Ahu Yildirmaz, co-head of the ADP Research Institute®. "This could be a result of increased efforts by employers to retain their employees as the labor market continues to tighten and skilled talent becomes scarce."
TABLE 2: Q2 2017 Annual Wage Growth by Industry
| Industry | Wage Level Full-Time | YOY Wage Growth Full-Time | Yearly Employment Growth | ||
| Holders | Switchers | Holders | Switchers | ||
| ALL | $34.09 | $35.77 | 4.4% | 4.9% | 1.9% |
| Manufacturing | 4.2% | 3.5% | 1.3% | ||
| Construction | 4.9% | 5.2% | 1.7% | ||
| Resources and Mining | 4.4% | -2.9% | 2.4% | ||
| Finance and Real Estate | 4.7% | 4.7% | 2.4% | ||
| Information | 5.2% | 5.8% | 0.0% | ||
| Professional and Business Services | 4.4% | 5.6% | 3.0% | ||
| Leisure and Hospitality | 5.0% | 6.7% | 2.8% | ||
| Education and Health Services | 4.0% | 5.8% | 1.7% | ||
| Trade, Transportation, and Utilities | 4.2% | 4.2% | 0.9% | ||
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
TABLE 3: Q2 2017 Annual Growth by Region
| Region | Annual Employment Growth |
Wage Level, Holders |
Wage Growth, Holders |
||
| West | 2.3% | 4.9% | |||
| South | 2.3% | 4.2% | |||
| Northeast | 1.5% | 4.3% | |||
| Midwest | 1.3% | 4.4% |
To summarize the trends across a variety of dimensions; the strongest wage growth can be found in the West, the leisure & hospitality and information industries, among women and younger workers, workers with little job tenure and those employed in large companies.
TABLE 4: Who Fared the Best in Second Quarter: Annual Wage Growth for Job Holders
| Age | 24 and younger | 8.8% | ||
| Tenure | Less than 3 years | 5.5% | ||
| Industry | Leisure & Hospitality/Information | 5.0% | ||
| Region | West | 4.9% | ||
| Gender | Female | 4.7% | ||
| Size | 500-999 | 4.7% |
The 3rd Quarter 2017 ADP Workforce Vitality Report will be released on Wednesday, October 18, 2017.
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/.
About ADP (NASDAQ: ADP)
Powerful technology plus a human touch. Companies of all types and sizes around the world rely on ADP cloud software and expert insights to help unlock the potential of their people. HR. Talent. Benefits. Payroll. Compliance. Working together to build a better workforce. For more information, visit ADP.com.
The ADP logo, ADP, ADP Research Institute and ADP Regional Employment Report are registered trademarks of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. All other marks are the property of their respective owners.
Copyright © 2017 ADP, LLC.
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Source: ADP, LLC
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