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American Cities Where Wages Are Soaring
Mike Sauter / 24/7 Wall St. / July 15, 2013
The average wage of a U.S. worker was $1,000 per week in the fourth quarter of 2012, or 4.7% higher from the same time in 2011, according to the Bureau of Labor Statistics (BLS). In some areas, pay rose than 10%.
In the San Francisco metropolitan area, the average wage grew by nearly 25%, more than any area in the country. Based on the BLS Quarterly Census of Employment and Wages, these are the cities with the biggest increases in pay.
In an interview with 24/7 Wall St., BLS Chief Regional Economist, Martin Kohli, noted that some of the metro areas with robust wage growth are relatively small, and the increase in average weekly wage in these places may be the result of “outliers, such as unusually large bonuses at a particular firm.”
In other cities, however, there appears to be a single industry that is behind the significant change in the average wages. For example, in Midland and Odessa, Texas, and Cheyenne, Wyoming, wages likely increased because of strong growth in the oil industry. In the two Texas cities, the mining, logging and construction industry, which includes oil-related employment, jobs grew by roughly 15% in each.
Moreover, “wages in natural resources and mining rose at a stronger-than-average rate of 6.1 percent over the year,” Kohli said, further pushing pay higher. This means that not only are jobs being added to the already high-paying industries and sectors, but these industries and sectors also are increasing pay, thereby amplifying the overall effect on wages.
In some of the cities where wages increased the most, growth appears to be the result of a single large business moving to the area. The obvious example of this is the San Francisco metropolitan area, where the one-year wage growth was more than double that of any other metro in the country.
The reason behind that growth is likely the social media company, Facebook Inc. (NASDAQ: FB), which moved its headquarters from Palo Alto to Menlo Park at the end of 2011. Menlo park is in San Mateo County, which is in the San Francisco metro area. While other counties in the San Francisco area all grew less than 10%, in San Mateo, the average weekly wage grew more than 100%.