Hiring Increase Spurs Higher Wages
August 4, 2014
Paul Davidson, USA TODAY
Wages in higher-end jobs are increasing as hiring heats up (file image)
Stronger job gains are spreading to middle- and higher-wage industries as employers gain confidence in the economic recovery.
In July, for the second straight month, employment growth in higher-wage industries such as business services, construction and manufacturing outpaced increases in low-wage sectors such as fast-food outlets, a UBS analysis shows.
Over the past two months, mid- and high-wage industries have added 257,000 jobs, while those with lower pay added 210,000, according to the research firm's analysis of Labor Department data.
The development marks a shift from last year, when many economists and worker advocates lamented that payroll advances were concentrated in low-paying sectors, such as restaurants and home health care.
Overall, employers added 209,000 jobs in July, Labor said Friday, the sixth straight month of 200,000-plus gains. More jobs in higher-wage industries would be a boon for the economy, raising average pay and bolstering consumer spending.
In the past year, job increases in low-wage industries substantially exceeded those in higher-wage sectors, but the disparity is narrowing, says UBS economist Drew Matus. UBS defines low-wage industries as those with average hourly pay below the 2012 U.S. median of $18.50 an hour.
Matus says low-paying jobs, such as retail cashiers and waiters, are typically the first to be added in a recovery as consumers begin shopping again. As earnings rise and companies expand into new markets, accountants and marketing directors are hired. "Low-wage jobs lead you out of the recession and then higher-wage jobs take over," he says.
In July, manufacturers added 28,000 jobs after adding 23,000 in June -- the industry's two strongest hiring months of the year. Architectural and engineering services added nearly 9,000 jobs, the biggest monthly gain since 2006. Accounting firms have added about 45,000 jobs this year, up from 10,000 in 2013.
More white-collar job candidates -- from software developers to human resource directors -- are receiving offers and counteroffers from employers this year, says Dawn Fay, who oversees the New York-area offices of staffing agency Robert Half.
Original headline: Job rise brings higher wages
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