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State of the Labor Market

February Jobs Report Preview: Wage Growth Is Happening Fastest for Workers in Low-Wage Industries


Starting in mid-2018, the long-awaited pick-up in wage growth seems to have arrived. In January 2019, wages grew by 3.2% year-over-year, up from the general 2.6-2.8% range wage growth had been hovering from mid-2016 to mid-2018. So where is this acceleration in wage growth coming from, and who is benefitting? The pick-up in wage growth seems to be stemming from low-wage industries. (Low-wage industries include department stores, employment services, and food services and drinking places).

Over 2018, wage growth in low-wage industries was 4.4%, while in middle- and high-wage industries it didn’t top 3%. Put another way: low-wage workers are likely the ones who are seeing the benefits of accelerating wage growth. A tighter labor market seems to be putting particular pressure on the lower-paid end.

This Friday, I’ll be looking to see:

  1. If wage growth continues to accelerate for low-wage industries;
  2. If the spike in workers working part-time who would have preferred full-time work due to the government shutdown disappears;
  3. If the continued streak of record job growth can bring down the long-term unemployment rate any further.