The place where a person works in the United States can make a significant difference in how much their salary increases. While national wage growth advances at a moderate pace, some cities register increases of more than 5%. Buffalo, New York, heads the list with the largest increase among the metropolitan areas analyzed by ADP.
According to ADP Pay Insights, private sector workers received in August a 4.7% increase in their gross salary compared to the same month of the previous year.
However, wages are not rising at the same rate across the country. The availability of workers, job growth and activity in certain industries are helping to boost wages in various metropolitan areas.
Data from the U.S. Bureau of Labor Statistics (BLS) show more moderate growth nationwide. In August, the average hourly earnings of private non-agricultural remuneration workers increased 3.1% compared to the previous year. The average salary was $37.75 per hour.
ADP focuses on private employment from its payroll records, while BLS offers a broader view of the labour market and includes public employment.
The BLS also that non-agricultural employment increased by 162,000 jobs during August and that unemployment rate was 4.1%.
ADP data is organized by metropolitan areas, not directly by states. This allows you to identify the cities and regions where workers are receiving the biggest increases. Buffalo-Cheektowaga, New York, ranks first, with a salary increase of 6.4% over the 12 months ended in August.
These are the metropolitan areas with the greatest increases:
One of the reasons behind the highest wage increases is the shortage of workers. When companies have trouble finding people with the skills they need, they can increase their offers to attract employees.
“Sometimes, labor shortages, caused by an ageing working population or a lack of matching between skills and the labor market, can lead to wage increases,” said Liv Wang, lead data scientist at ADP.
According to ADP, the base salary of those who remained in their employment increased 3% in August compared to the previous year. Among those who changed jobs, the increase was 4.7%. When considering the gross salary, workers who retained their jobs had an increase of 4.4%, while those who changed companies registered a growth of 7.3%.
Industry can also determine how fast wages grow. In August, construction recorded the highest increase among the sectors analyzed by ADP, with 5.6%. Financial activities and manufacturing took the next place, both with 5.4%.
These are the sectors with the highest wage growth:
The strong presence of manufacturing and financial services in some cities helps explain why certain areas appear among those with the highest increases.
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