Eight years of solid job growth, unemployment rate dropping to pre-recession levels, and yet the growth in metro Atlanta pay has decelerated — and it wasn’t that strong to begin with, according to a report this week.
The median wage in the area ticked up just 1 percent in the past year, compared to a 3 percent increase the year before, said Glassdoor, a California-based job and recruitment web site that tracks millions of salary reports.
The jobless rate dropped from double-digits in the aftermath of the recession to 5 percent at the start of 2017. The most recent data released shows the unemployment rate at 4.2 percent – seemingly the sign of a tight labor market with competition for workers.
That usually forces employers to give healthy raises as they try to attract and retain talent.
Only it hasn’t been happening — here or nationally. The U.S. also saw a paltry increase — 1.1 percent — in median wages, said Andrew Chamberlain, Glassdoor’s chief economist.
“Wage growth remains weak as we close out the year,” he said.
Explanation for that apparent disconnect — between falling unemployment and pay — has been debated by economists.
Chamberlain said he thinks the job market is not as tight as the unemployment rate makes it look. Millions of American workers dropped out of the labor force during the recession. Afterwards, many young workers had trouble getting jobs.
But as hiring continues, many discouraged workers come off the sidelines and into the game — but often at below-average wages “to get their foot in the door with employers,” Chamberlain said. “This impacted overall U.S. pay.”
During previous times of a similar unemployment rate, the share of people in the workforce was much higher, said Elise Gould, economist for the Economic Policy Institute. In 1998, 81.2 percent of the people in their prime working years were in the workforce. In 2006-07, 80.1 percent of “prime-age” Americans were in the workforce.
Last year, just 78.5 percent of prime age Americans were in the workforce. In a labor force of 150 million people, the difference amounts to millions of people on the sidelines.
Last year, the metro with the fastest wage growth was San Francisco, which also had the highest pay of any major metro. The Bay Area’s median pay is $68,078, up 2 percent for the year. The median base pay in metro Atlanta is $52,842, slightly more than the national median of $51,210.
Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University, said the data show that unemployment rates are not an accurate guide to the tightness of a labor market.
“There was a correlation in the old days,” he said. “I think that correlation has been broken for a while.”
But wages are not the only measure of how well employees are doing, he said: There are also 401(k) and other company-backed savings, healthcare benefits and, for many executives, stock options.
“Glassdoor is only giving you a partial window on total compensation,” Dhawan said.
Many employees are in demand, but when they are compensated in other ways, the wage data doesn’t shine a light on their situation, he said. “It just depends on which skill set you have.”
Healthcare is the sector with the strongest growth in pay in metro Atlanta, according to Glassdoor. For instance, medical technologists saw median pay jump 6.2 percent during the past year to $58,301.
And while the shift to online buying in recent years has shaken up “brick-and-mortar” retail, it has boosted demand in “e-commerce” positions, Glassdoor said.
The median pay for warehouse associates was up 4.1 percent to $41,006, while there was a 3.3 percent increase in pay for truck drivers to $51,454 and delivery drivers to $36,706.
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