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The PayScale Index: Real Wages Fell in 2018

Topics: Data & Research
real wages

Nominal wages grew 1.1 percent in Q4 2018, according to The PayScale Index. However, the value of workers’ pay (after inflation) declined 1.3 percent year-over-year.

That means that while the number on employees’ paychecks increased, the buying power of their earnings declined. Currently, real wages are 9 percent lower than in 2006, before the last recession.

Blue-collar jobs were especially hard hit. Wages in Transportation and Manufacturing jobs suffered the largest losses, declining 3.9 percent and 2.4 percent year-over-year respectively. Jobs in Installation, Maintenance & Repair, Construction and Food Service also declined.

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Where Wages Are Growing

By comparison, wages grew for workers at jobs in Marketing & Advertising, Art & Design, Sales and Information Technology. Tech was a winner on the industry side, too, topping the list for wage growth at 2.7 percent year-over-year.

“There is no question this is a turbulent period for the U.S. economy, which means uncertain wage growth across many jobs and industries as well as a continual decline in real wages for most workers,” said Katie Bardaro, Chief Economist at PayScale, in a statement. “Our most recent Index shows technology jobs – along with cities which have a heavy emphasis on technology – are some of the few, consistent winners when it comes to increasing wages in these volatile times.”

Metro areas with a high concentration of tech companies saw wage gains last quarter. San Francisco led with 4.9 percent year-over-year wage growth, followed by San Jose, San Diego, Portland and Seattle.

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Methodology: The PayScale Index tracks quarterly changes in total cash compensation for full-time, private industry employees and education professionals in the United States. In addition to a national index, it includes separate indices for specific industries, metropolitan areas, job categories and company sizes. The PayScale Index uses 2006 average total cash compensation as a baseline.

Jen Hubley Luckwaldt
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