Why The Drop in Avg. Weekly Wages?

In a presentation I gave to the NH Senate Ways and Means Committee I noted two important wage trends. First, the average weekly wage of NH workers today is actually a bit lower than it was in June of 2017. This does not mean that no worker’s wages are increasing.  Rather, it reflects the mix of industry and occupational job growth in NH.  Lower productivity and wage industries have added more jobs in NH than have higher productivity/wage industries.average weekly wages

Second, the weighted average weekly wage in the industries that added jobs in 2018 was $946 while it was $1,163 in the industries that lost jobs.    But it is not accurate to suggest this implies the NH economy is somehow being “hollowed-out” of higher paying jobs.  Data from the end of 2018 showed that there where 50% more job openings in the state in occupations that require a college degree (9,522) compared to jobs that don’t require a degree (6,132) at the same time there were 60% fewer individuals looking for a job and who have a degree than those looking for a job who don’t have a degree (5,532 vs 13,380).

openings an ed

Labor shortages are significant in all industries but higher skill jobs are much harder to fill so more lower skill/wage jobs are being added while higher skill jobs go unfilled, skewing the job growth mix and lowering wage growth trends in the state.  Other contributing factors to slower average weekly wage growth in include a small decline in the average number of hours worked per week by employees in many industries.

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2 Comments on “Why The Drop in Avg. Weekly Wages?”

  1. Michael Lee Says:

    Brian, could the mismatch you describe be due to “degree inflation”?

    https://hbswk.hbs.edu/item/why-employers-must-stop-requiring-college-degrees-for-middle-skill-jobs?cid=wk-rss


    • An interesting thought (and article) Michael. The official (BLS) designation for what level of education is required for an occupation do not account for “degree inflation” and those are the basis of my comments about a mismatch. Still there is no denying that employers have preferred degree workers over those without a degree. I see that as much a problem with secondary schooling in the U.S. as anything else. Unlike decades ago, obtaining a high school diploma signals almost nothing about the capabilities of high school graduates, in that situation employers will generally prefer a post secondary degree because it at least signals some level of competence.


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