In recent years, real wages among workers have grown. Not by much – 3% since 2019, but given that wage growth was either stagnant or declining before that, 3% is a step in the right direction. Additionally, for the first time in decades in the US, real wage growth has outpaced inflation, meaning that workers are actually taking home more money.
The regional Federal Reserve Banks track a variety of economic and economic-adjacent data. One of the new measures the Atlanta Federal Reserve Bank has put together is a wage tracker. The data for this tracker show the growth of wages for various demographic groups over time.
It’s interesting to note currently that the three lowest-growth groups are job-stayers (those who occupy the same job they did a year ago – 4.8%); women (5.1%); and workers with college degrees (5.1%). To compare, the highest wage growth in October 2023 was found among job switchers (workers who took a new job in the last 12 months – 5.6%), prime age workers (workers between the ages of 25 and 54 – 5.6%); and male workers (5.4%).
To reiterate, people who are working for the same employer they had last year have been rewarded for their loyalty with the slowest wage growth among all workers. People lose money by staying in their jobs. Workers with college degrees see lower wage growth than workers in service industries; hourly workers; and people who have switched jobs in the last year. Wage growth among college degree holders is currently on par with the wage growth for female workers. (Not surprising since a majority of college graduates are female.)
Using wage growth data to help students
Despite the mixed news on wage growth, the data do point to some opportunities for community colleges. Among all demographic groups, workers who switched jobs saw the highest wage growth. That means there is still good reason to train (or retrain) for a new position, especially for prime age workers. Employers have demonstrated that they are willing to compete financially for these workers, and community colleges should take advantage of that.
Promoting programs that train people for high-wage, high demand jobs can help workers take advantage of these trends. The high-wage, high-demand credentials can work in two ways: first, it will enable people with no previous experience to enter these sectors. Second, it can help these workers move among employers in the sector to further increase their salaries once they have completed a credential.
Additionally, it’s important for students to know that employers don’t reward longevity and/or loyalty in the same way they reward new hires. Community colleges would do well to discuss this strategy with their students to better improve their long-term earnings data. The long-term earnings data has taken on new importance with the advent of the new Gainful Employment rules. Teaching students how to make the most of their educational credentials once in the workforce is one strategy to help a community college that relies heavily on non-degree certificates to retain its Title IV privileges.
Photo Credit: Mizzou CAFNR