Despite headline-grabbing pay increases across many sectors, the real story of American wage growth is far more nuanced, revealing a complex tug-of-war between rising paychecks and persistent inflation that has left many workers wondering if they are actually getting ahead.
Key Takeaways
- U.S. average hourly earnings for all employees on private nonfarm payrolls rose 4.1% year-over-year in December 2023
- Real median weekly earnings for full-time wage and salary workers increased by 0.3% from the fourth quarter of 2022 to the fourth quarter of 2023
- Nominal median weekly earnings grew 4.1% year-over-year in Q4 2023
- Real wages up 1.2% in Canada for 2023
- U.S. construction sector average hourly earnings grew 5.2% YoY Dec 2023
- Leisure and hospitality wages up 4.8% YoY in 2023
- Real median weekly earnings for men aged 25-54 grew 0.5% in 2023
- Women's real median weekly earnings up 1.1% YoY Q4 2023
- Black workers nominal wage growth 4.2% in 2023
- California average hourly earnings up 4.5% YoY Dec 2023
- New York state wage growth 4.2% in 2023
- Texas private sector wages up 5.1% YoY 2023
- OECD average wage growth 3.8% in 2023
- Germany real wages up 2.1% in 2023 after decline
- UK nominal wage growth 5.9% YoY Dec 2023
While nominal wages rose, real gains were modest and varied across industries.
Demographic Wage Growth
- Real median weekly earnings for men aged 25-54 grew 0.5% in 2023
- Women's real median weekly earnings up 1.1% YoY Q4 2023
- Black workers nominal wage growth 4.2% in 2023
- Hispanic wage growth 4.5% YoY 2023
- White non-Hispanic wages up 3.9% 2023
- College graduates wage growth 3.6% YoY 2023
- High school graduates only up 4.3% nominal 2023
- Workers aged 25-34 saw 4.1% wage growth 2023
- Ages 35-44 wage growth 3.8% YoY
- 45-54 year olds up 3.7% wages 2023
- Workers over 55 wage growth 3.4% 2023
- Men with bachelor's degree real wages up 0.8% 2023
- Women without college up 4.6% nominal 2023
- Asian American wage growth 4.0% YoY 2023
- Union members wage growth 4.7% vs non-union 3.5% in 2023
- Full-time workers median earnings $1,145 weekly up 4.1% 2023
- Part-time median weekly earnings up 3.9% 2023
- Low-wage workers (bottom 10%) up 5.2% 2023
- High-wage (top 10%) growth 2.9% YoY 2023
- Mothers vs fathers wage gap narrowed with 1.2% faster growth for mothers 2023
- Veterans wage growth 4.0% vs non-vets 3.9% 2023
- Disabled workers up 3.6% wages 2023
- Immigrants native-born wage growth differential 4.4% vs 3.8% 2023
- Gen Z workers (18-24) up 5.1% 2023
- Baby boomers wage growth 2.8% YoY 2023
- STEM educated wages grew 4.2% 2023
- Non-STEM bachelor's up 3.5% 2023
Demographic Wage Growth Interpretation
In a welcome plot twist for the American economy, 2023 saw a refreshingly equitable script where the understudies—lower-wage workers, women, and union members—finally got a few more lines and a significantly better payday than the usual leading actors.
Industry Sector Wage Growth
- Real wages up 1.2% in Canada for 2023
- U.S. construction sector average hourly earnings grew 5.2% YoY Dec 2023
- Leisure and hospitality wages up 4.8% YoY in 2023
- Manufacturing wage growth 3.4% YoY Q4 2023
- Financial activities sector wages rose 4.5% YoY 2023
- Health care and social assistance hourly earnings up 4.0% YoY
- Retail trade wages grew 3.9% YoY Dec 2023
- Professional and business services up 4.1% wage growth 2023
- Information sector wages increased 3.7% YoY Q4 2023
- Transportation and warehousing up 5.0% YoY 2023
- Education services wage growth 3.2% YoY
- Mining and logging sector up 6.1% wages YoY Dec 2023
- Utilities wages grew 4.3% YoY 2023
- Wholesale trade up 4.2% wage growth 2023
- Other services sector 3.6% YoY increase
- Tech industry software developers wages up 4.5% in 2023
- Construction laborers wages grew 5.8% YoY 2023
- Registered nurses in health care up 3.9% 2023
- Retail salespersons wages 4.1% YoY growth
- Heavy truck drivers up 6.2% wages 2023
- Accountants in finance grew 3.5% YoY
- Food service workers up 5.3% in hospitality 2023
- Lawyers in professional services 3.8% growth
- Electricians in construction up 4.7% 2023
- Software quality assurance up 5.1% in IT
- Home health aides 4.4% YoY growth 2023
- Bartenders in leisure up 6.0% wages
- Financial managers 4.0% growth 2023
Industry Sector Wage Growth Interpretation
The wage parade of 2023 saw everyone get a slightly bigger hat, though the miners and bartenders are now wearing top hats while teachers are still adjusting their caps.
International Wage Growth
- OECD average wage growth 3.8% in 2023
- Germany real wages up 2.1% in 2023 after decline
- UK nominal wage growth 5.9% YoY Dec 2023
- France wages grew 4.2% in 2023
- Japan average wage increase 2.3% in 2023 shunto
- Canada average hourly wages up 4.0% YoY 2023
- Australia wage growth 4.1% annually Q4 2023
- Euro area compensation per employee up 4.7% YoY Q4 2023
- China urban wage growth 5.8% in 2023
- India real wage growth 2.5% for regular workers 2023
- Sweden wages up 4.5% 2023
- South Korea minimum wage up 5.0% to 9,860 KRW/hour 2024
- Brazil formal sector wages grew 4.3% 2023 adjusted
- Mexico wage growth 4.9% nominal 2023
- Spain real wages down 0.5% but nominal 3.2% 2023
- Italy compensation per employee 3.9% YoY 2023
- Netherlands wages up 5.1% 2023
- Switzerland nominal wages 2.0% growth 2023
- Singapore wage growth 5.5% for rank-and-file 2023
- South Africa average wage increase 6.2% in 2023 surveys
- Russia real wages up 7.4% in 2023
International Wage Growth Interpretation
While the global wage party featured a respectable average tempo, its attendees danced to wildly different beats, from Germany's cautious waltz into positive territory and Spain's unfortunate stumble with inflation, to Russia's unexpectedly boisterous mazurka and South Africa's vibrant jive.
Overall Economy Wage Growth
- U.S. average hourly earnings for all employees on private nonfarm payrolls rose 4.1% year-over-year in December 2023
- Real median weekly earnings for full-time wage and salary workers increased by 0.3% from the fourth quarter of 2022 to the fourth quarter of 2023
- Nominal median weekly earnings grew 4.1% year-over-year in Q4 2023
- Average hourly earnings for production and nonsupervisory employees increased 4.2% from December 2022 to December 2023
- Compensation costs for civilian workers increased 4.0% over the 12 months ending December 2023
- Wages and salaries for civilian workers rose 3.9% year-over-year in Q4 2023
- U.S. real average hourly earnings declined 0.4% from November 2022 to November 2023
- Nominal average hourly earnings grew 4.1% YoY in May 2024
- Employment Cost Index for wages rose 4.2% over 12 months ending March 2024
- Private industry compensation costs increased 3.9% YoY in Q1 2024
- U.S. wage growth for all private employees was 3.8% in 2023 annually
- Atlanta Fed Wage Growth Tracker showed 4.1% median wage growth in April 2024
- U.S. average weekly earnings rose 3.5% YoY in 2023
- Real hourly wages grew 0.5% in 2023 for typical workers
- Nominal wage growth averaged 4.6% in 2022 for U.S. workers
- U.S. unit labor costs increased 2.7% in Q4 2023, related to wage pressures
- Wage growth for private sector was 4.3% YoY in June 2024
- Real compensation per hour fell 1.1% in Q1 2024
- U.S. labor share of income showed wage growth stagnation at 62.4% in 2023
- Average annual wages in U.S. reached $59,384 in 2022, up 5.4% from 2021
- Wage growth slowed to 3.2% in manufacturing overall in 2023
- EPI reports typical worker wages up 1.7% real in first half 2024
- FRED data: Real median personal income grew 0.2% YoY in 2023
- BLS: All employees hourly earnings up 3.9% YoY Q2 2024
- Wage Phillips curve suggests 3.5% growth in 2024
- U.S. decile wage growth at 10th percentile was 4.5% nominal 2023
- 90th percentile wage growth 3.2% YoY 2023
- Median wage growth 3.8% for U.S. in 2023
- Atlanta Fed tracker at 3.9% in June 2024
- Nominal wage growth 4.0% projected for 2024
Overall Economy Wage Growth Interpretation
Reading this spread of data feels like watching wages sprint admirably on a treadmill of inflation, where the nominal cheers are loud but the real finish line keeps frustratingly drifting just out of reach.
Regional Wage Growth
- California average hourly earnings up 4.5% YoY Dec 2023
- New York state wage growth 4.2% in 2023
- Texas private sector wages up 5.1% YoY 2023
- Florida hourly earnings growth 4.8% 2023
- Midwest region average 3.9% wage growth Q4 2023
- Northeast wages up 4.0% YoY 2023
- South Atlantic states 4.6% growth 2023
- Pacific division (West Coast) up 4.3% 2023
- Urban areas median wage growth 4.1% vs rural 3.7% 2023
- Rust Belt states (OH, MI, PA) average 3.5% wage growth 2023
- Sun Belt (AZ, NV) up 5.3% YoY 2023
- NYC metro area wages grew 4.4% 2023
- Los Angeles metro up 4.7% 2023
- Chicago wages 3.8% growth YoY
- Boston area 4.2% wage increase 2023
- Dallas-Fort Worth up 5.0% 2023
- Seattle metro wages grew 4.9% YoY 2023
- Rural Midwest counties 3.2% growth 2023
- Appalachian region up 4.1% 2023
- Great Plains states average 4.0% wage growth
- New England states 3.9% YoY 2023
- Mountain West (CO, UT) up 4.6% 2023
- Gulf Coast (LA, MS) 4.4% growth 2023
- Upper Midwest (MN, WI) 3.7% 2023
Regional Wage Growth Interpretation
The nation's wage growth paints a clear picture of workers chasing the sun, with the Sun Belt's sizzling 5.3% leads illuminating a stubbornly cooler and more tepid Rust Belt trailing at 3.5%, proving that while everyone got a raise, some thermostats are simply set higher than others.
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