Wisconsin wage growth among the 10 slowest in the nation over the summer

Economic indicators

Last updated on September 23rd, 2021 at 05:19 pm

Private sector hourly wages in Wisconsin grew an average of 2.4% year-over-year in June, July and August, the 42nd fastest pace in the country, according to data from the U.S. Bureau of Labor Statistics.

The average hourly wage in August was $28.12, up from $27.36 in August 2020, an increase of 2.8% increase. July saw a 2.6% year-over-year increase and June’s increase was 1.8%.

The pace of wage growth in Wisconsin lagged behind the top states, six of which averaged wage growth of more than 6%.

Ohio led the way with nearly 6.6% growth, including a $1.68 year-over-year increase for August. Virginia was second with a 6.5% increase. Texas was up 6.4%, Idaho averaged a 6.3% increase, Alabama was up 6.2% and North Carolina was up 6.1%.

Wisconsin’s wage growth was also slower than its neighboring states, including Michigan, up 5.3%, Illinois, up 5%, Indiana, up 4.4%, Minnesota, up 3.8%, and Iowa, up 3.7%.

The slower wage growth comes as many employers have found it difficult to attract candidates to fill open roles. Some have pointed to enhanced pandemic unemployment benefits as a reason workers are not returning to open jobs while others have highlighted challenges like difficulty with childcare.

Wisconsin has seen an uptick in its labor force participation rate this year. In January, the rate was at 65.5%, but it has since climbed a full percentage point to 66.5% as of August. Only Florida, up 2.3 percentage points to 59%, and Iowa, up 1.3 points to 66.8%, have seen stronger increases. California and Washington also saw one-point increases.

Overall, Wisconsin labor force participation rate ranks 10th in the country.

Wisconsin did see stronger wage growth in the leisure and hospitality sector, which has been among the areas struggling to hire amidst the COVID-19 pandemic. In August, the average hourly leisure and hospitality wage in Wisconsin was $16.63, up $1.74 or 11.7% from August 2020. July saw a 9.8% year-over-year increase and June’s increase was 7.7%. The 9.7% average increase over the summer months ranked 22nd in the country. Many of Wisconsin’s neighboring states saw similar increases, including 10% averages in Iowa and Indiana, 9.9% in Illinois and 9.3% in Michigan. Minnesota was an outlier with a 3.6% average increase.

North Carolina saw the fastest leisure and hospitality sector wage growth with 14.9% average increase for the three months, including a $2.12 jump from August 2020 to August 2021.

Conversely, in manufacturing, another sector where employers have lamented the difficulty of hiring, the average hourly wage for production workers is flat to slightly down in Wisconsin. In August, the average hourly production wage was up 19 cents from the prior year to $22.18, a 0.9% increase. However, in July the average wage was down 0.5% and it dropped 0.6% in June. For the three-month period, the average change was a 0.1% decrease that ranks 41st in the country.

Similar to the overall wage picture, neighboring states outpaced Wisconsin for production worker wage growth. Indiana was the closest with an average increase of 2.2%, followed by Illinois at 2.5%. Michigan and Minnesota were in the middle-of-the-pack nationally at 4.2% and 4.5% respectively while Iowa ranked fourth in the country with an average increase of 9.2% year-over-year.

Texas saw the strongest wage growth for production workers, averaging an 11.7% increase over the summer, including a $2.90 year-over-year increase in August.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He spent also five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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