The Strongest and Weakest Industries for Wage Growth
Looking for a well-paid job in construction or real estate? Most people know that the chances of getting hired or getting a raise in either of those industries are pretty slim these days. In fact, average wages in both real estate and construction are down from where they were even a year ago. But there areindustries where salaries are finally growing as we recover from the recent recession.
Online salary database has collected salary data dating back to 2006 to create a new economic indicator, the PayScale Index. This index, which will be refreshed quarterly, tracks the changes in average wages of full-time employees in 16 different private-industry sectors. It’s clear that the recession hit every sector. But which industries suffered the greatest wage losses, and which are recovering fastest?
Here’s a list of the top five industries for wage growth, as well as the percentage of average wage increase between Q3 2009 and Q3 2010 for each:
1. Utilities +0.8%
This industry’s resilience isn’t too surprising when you consider that, no matter what the economy is doing, consumers are likely going to spend money on electricity, natural gas, and other basics, says Al Lee, PayScale’s director of quantitative analysis. They may try to cut back on electricity use, but they’ll still need it and pay for it.
2. Mining, Oil & Gas Exploration +0.6%
Commodities have been doing well in recent years, with the price of gold up fourfold since 2001, according to OnlyGold.com. Plus, oil and gas exploration continues to expand through the use of new extraction technologies and the discovery of new deposits. And demand for both oil and gas tends to stay high because it’s measured internationally–and even if one country is growing slowly for a while and using less petroleum, there’s likely another one that’s booming and consuming more, says Lee.
3. Finance & Insurance +0.5%
Banks suffered big personnel losses during the recession. But while many people in the finance industry may remain unemployed, those who have jobs are seeing an increase in wages. Lee suspects this is due to a return to profitability across the industry in 2010, after the crisis and federal bailouts of 2008 and early 2009.
4. Health Care & Social Assistance +0.2%
Health care is not a cyclical industry, so it’s no surprise that it is on the positive side, according to Lee. “People don’t stop going in for surgery or high-blood-pressure medication,” he says. Compared with all of the industries in the PayScale Index, health care suffered a relatively small and brief drop in wages during the recession.
5. Retail +0.2%
Retail certainly wasn’t the place to be when the recession was hitting bottom, but it wasn’t the worst and is currently showing signs of life. And considering how badly retail was hit during the recession, this uptick (albeit small) is a strong sign that the economy is truly recovering.
How are other industries doing?
Of the 16 industries the PayScale Index tracks, seven of them have experienced positive wage trends or at least remained steady in the last year. Among the remaining industries, these five are recovering the slowest, with lower wages than last year:
- Construction -0.8%
- Business Operation & Support Services -0.6%
- Real Estate & Rental Services -0.5%
- Arts, Entertainment & Recreation -0.5%
- Information, Media & Telecommunications -0.3%