The PayScale Index: Watching Wages Go Up and Down
By Staff Writer As an HR practitioner, you’ve been on a roller coaster in the past few years trying to keep up with failing markets, rampant unemployment and, now, signs that things may be improving. Whether you laid-off employees, eliminated bonuses or paid certain workers a premium to keep them around, wouldn’t it be nice to know what actually happened with wages during this time?
PayScale has created a new tool to help you do just that. PayScale’s data team has collected and processed over 23 million salary surveys since its inception and wants to put them to work in a new way. Instead of only using the data from the present moment to help HR professionals and business owners make decisions about what to pay their employees, we can now look back at salary trends from the past to provide more perspective. We call our new tool The PayScale Index.
The PayScale Index follows the change in wages of employed US workers, revealing trends in compensation over time. It specifically measures the quarterly change in the total cash compensation of full-time private industry employees nationally, with additional detail on the 20 largest metropolitan areas, 15 industries, and three company sizes.
How Bad Was the Recession?
When asked what overall salary trends The PayScale Index uncovered in recent years, Al Lee, director of quantitative research at PayScale and leader of the study, said, “People on social security haven’t gotten a raise in the last two years because there has been no cost of living increase. But, they have done better than the rest of America.”
Lee says that wages for most private industry workers have dropped a least a percentage point since 2008. In fact, PayScale found that since 2006, wages have increased only four percent while the Consumer Price Index has increased 7.5 percent. This means less spending power for most Americans.
What other interesting facts did The PayScale Index bring to light?
– The typical worker in Detroit, doing the same job as in 2006, earns nearly 6.8 percent less in buying power (real dollars) today than in 2006.
– Over the last 12 months through Q3 2010, only five of 20 metros covered in The PayScale Index have had wage increases greater than 0.1 percent. Those metros areas are Baltimore (1.6 percent) and St. Louis (0.6 percent), Washington, DC (0.5 percent), New York (0.4 percent), and Phoenix (0.4 percent).
– The worst period for full-time private sector employee wages since 2006 were the six months between Q4 2008 and Q2 2009.
– In the last 12 months since Q3 2010, only six of 15 industries covered in The PayScale Index have had wage increases greater than 0.1 percent. They are utilities (0.8 percent), mining and oil and gas extraction (0.6 percent), finance (0.5 percent), healthcare (0.2 percent), transportation (0.2 percent) and retail (0.2 percent).
Curious about wages for your industry and location? PayScale can pull you a complementary compensation trends report by industry, location and company size for you.
In upcoming posts, we’ll highlight the activity in certain industries, cities and company sizes to help you better understand what The PayScale Index can teach you about salaries past and future.
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