U.S. wage growth among job switchers increased 5.8 percent since June 2020 according to the ADP Research Institute® Workforce Vitality Report (WVR) released yesterday. Overall wage growth decelerated to 2.3 percent in the second quarter, down from a 6 percent average in the first quarter 2021. Employment growth took a positive turn in the second quarter and increased by 3.5 percent in June 2021.
“ADP data shows a rise in U.S. job switchers across industries along with increased wage growth for switchers,” said Nela Richardson, chief economist, ADP. “The increase in wage growth for job switchers could be driven by employers struggling to find talent and are willing to offer competitive compensation to secure employees. Leisure and hospitality, which experienced the greatest job loss due to the pandemic, is a notable exception to this overall trend. While leisure and hospitality led employment gains in the first half of 2021, it is the only industry where both job holders and job switchers are earning lower wages on average compared to a year earlier.”
Employment growth year-over-year increased 3.5 percent, although construction, manufacturing, resources and mining, as well as information sectors saw employment shrink. Leisure and hospitality saw the biggest gain with 13 percent employment growth. This sector also experienced the smallest wage growth, likely due to the increase in low wage workers entering the sector. Specifically, job holders and job switchers both reported a decline in wage growth at -1.39 percent and -1.27 percent.
Table 1: Wage and Employment Growth by Industry – June 2021
Across the U.S., most regions experienced similar wage growth, except for the Northeast which experienced minimal wage growth at 0.9 percent. However, the Northeast saw the highest overall employment growth regionally at 5.8 percent. Job switchers also fared better in the Northeast and the West with wage growth of 8.0 and 7.1 percent respectively. By firm size, larger firms did better both from a wage and employment perspective compared to small businesses.
|
Industry |
Wages |
YOY Wage Growth |
Yearly Growth |
||||
|
All |
Holders |
Entrants |
Switchers |
Employment |
Switching |
||
|
-ALL- |
$30.85 |
2.32% |
3.08% |
3.26% |
5.83% |
3.47% |
20.39% |
|
Goods |
|||||||
|
Construction |
$30.86 |
4.23% |
4.50% |
5.81% |
5.94% |
-1.91% |
14.74% |
|
Manufacturing |
$32.09 |
2.45% |
3.36% |
6.17% |
6.73% |
-0.63% |
16.78% |
|
Resources and |
$39.35 |
-0.50% |
6.06% |
0.00% |
11.81% |
-1.27% |
5.33% |
|
Services |
|||||||
|
Information |
$45.39 |
2.63% |
3.74% |
3.97% |
9.75% |
-4.27% |
20.05% |
|
Finance and |
$36.13 |
1.55% |
3.89% |
5.73% |
7.84% |
0.96% |
16.83% |
|
Professional |
$39.31 |
4.37% |
4.72% |
7.53% |
9.59% |
3.73% |
22.84% |
|
Education and |
$28.89 |
1.61% |
1.92% |
3.51% |
4.46% |
4.11% |
18.69% |
|
Leisure and |
$18.96 |
-2.12% |
-1.39% |
0.18% |
-1.27% |
13.32% |
26.03% |
|
Trade, |
$27.24 |
4.89% |
4.12% |
0.41% |
2.21% |
3.03% |
23.42% |
Table 2: Wage and Employment Growth by Region and Firm Size – June 2021
There was a slight uptick in voluntary job switching, increasing by 1 percentage point in June 2021. Leisure and hospitality saw the largest jump in switching rate, increasing by 5 percentage points in June 2021. Leisure and hospitality was hit the hardest during the pandemic, and as more businesses have re-opened and restrictions loosened, job opportunities have become more plentiful. Among the genders, female switchers continue to outpace males in wage growth, albeit from a lower wage level.
|
Region |
Wages |
YOY Wage Growth |
Yearly Growth |
||||
|
All |
Holders |
Entrants |
Switchers |
Employment |
Switching |
||
|
-USA- |
$30.85 |
2.3% |
3.1% |
3.3% |
5.8% |
3.5% |
20.4% |
|
MIDWEST |
$28.49 |
2.4% |
1.7% |
4.3% |
3.0% |
0.7% |
19.2% |
|
NORTHEAST |
$34.90 |
0.9% |
3.0% |
3.7% |
8.0% |
5.8% |
21.0% |
|
SOUTH |
$28.58 |
2.3% |
3.5% |
3.0% |
5.6% |
3.4% |
20.7% |
|
WEST |
$33.61 |
3.0% |
3.7% |
3.3% |
7.1% |
4.5% |
20.6% |
|
Company |
|||||||
|
-ALL- |
$30.85 |
2.3% |
3.1% |
3.3% |
5.8% |
3.5% |
20.4% |
|
49 or less |
$27.75 |
0.7% |
2.3% |
3.6% |
4.6% |
2.7% |
15.8% |
|
50 to 499 |
$30.80 |
2.5% |
3.8% |
4.2% |
6.0% |
2.4% |
21.7% |
|
500 to 999 |
$31.92 |
1.8% |
2.2% |
4.1% |
3.2% |
4.5% |
20.2% |
|
1000 or more |
$32.50 |
3.1% |
3.4% |
2.3% |
6.9% |
4.5% |
22.6% |
Table 3: Wage and Switching Rate by Industry and Gender – June 2021
Employment growth for all age groups increased as the economy continued to reopen and COVID-19 related restrictions were lifted in second quarter 2021. Most notably, workers age 24 or less saw the greatest employment growth of 13.5 percent in June 2021. As a result of the pandemic, younger workers suffered the greatest job loss, and therefore have the most to gain as they reenter the workforce. However, wage growth has slowed across age groups.
|
Industry |
Gender |
Share |
Switching Rate |
Switching Wage |
Switchers’ |
|
ALL |
Female |
48% |
21.3% |
$27.79 |
6.4% |
|
Male |
52% |
19.6% |
$32.61 |
5.5% |
|
|
Construction |
Female |
23% |
15.5% |
$27.18 |
6.2% |
|
Male |
77% |
14.5% |
$29.33 |
6.0% |
|
|
Manufacturing |
Female |
35% |
18.3% |
$36.19 |
8.0% |
|
Male |
65% |
16.1% |
$36.37 |
6.1% |
|
|
Finance & Real |
Female |
54% |
16.8% |
$31.80 |
7.4% |
|
Male |
46% |
16.8% |
$39.40 |
8.6% |
|
|
Information |
Female |
41% |
20.1% |
$48.86 |
10.1% |
|
Male |
59% |
20.0% |
$55.76 |
9.7% |
|
|
Professional & |
Female |
48% |
24.5% |
$38.90 |
9.3% |
|
Male |
52% |
21.5% |
$45.56 |
10.1% |
|
|
Education & Health |
Female |
77% |
19.4% |
$24.78 |
4.1% |
|
Male |
23% |
16.5% |
$34.13 |
5.6% |
|
|
Leisure & Hospitality |
Female |
51% |
26.2% |
$15.08 |
-2.7% |
|
Male |
49% |
25.9% |
$16.61 |
-0.2% |
|
|
Trade, Transportation |
Female |
42% |
25.0% |
$24.33 |
5.8% |
|
Male |
58% |
22.4% |
$27.19 |
0.5% |
Table 4: Wages by Gender and Age – June 2021
|
24 or less |
25 to 34 |
35 to 54 |
55 or more |
-ALL- |
||
|
Employment |
-ALL- |
13.5% |
1.0% |
1.1% |
4.4% |
3.5% |
|
Female |
19.4% |
1.9% |
1.4% |
4.9% |
4.9% |
|
|
Male |
7.5% |
0.2% |
0.9% |
4.0% |
2.2% |
|
|
Wage Growth |
-ALL- |
0.9% |
3.1% |
3.1% |
1.7% |
2.3% |
|
Female |
0.7% |
4.2% |
4.1% |
1.9% |
2.8% |
|
|
Male |
1.5% |
2.3% |
2.4% |
1.7% |
2.1% |
|
|
Wage Level |
-ALL- |
$15.99 |
$26.45 |
$35.04 |
$35.14 |
$30.85 |
|
Female |
$15.10 |
$25.11 |
$31.00 |
$29.22 |
$27.25 |
|
|
Male |
$16.85 |
$27.57 |
$38.27 |
$39.68 |
$33.81 |
|
|
Males Earning More |
12% |
10% |
23% |
36% |
24% |
|
