The U.S. is not just adding jobs at the fastest pace since the end of the Great Recession. Hiring is also more spread out and the new jobs pay better than in years past.
As the chart below shows, more than half the jobs the economy has added so far this year are in positions that pay higher than the hourly U.S. wage. Some 58 percent of the new jobs created in 2014 pay above the average hourly wage of $24.45.
By contrast, about 48 percent of the new jobs created in 2013 paid above the national average, according to a MarketWatch review of the data.
What’s going on? Businesses in 2014 are hiring more white-collar employees, construction is on the mend, health care is going strong and even the long-downtrodden financial industry is finally getting into the act.
About 42 percent of the new jobs, meanwhile, fall into categories that pay less than the average wage, but even that overstates the case.
Consider the generally lower-paying retail business, a sector that’s one of the biggest job creators. Retailers have generated nearly 100,000 jobs in the first six months of the year, but almost one-third are at auto dealerships. While the average retail job pays just $17 an hour, employees at stores that sell autos and auto parts make about $22 to $25 an hour.
No surprise there. Auto sales are at the highest level since 2006 with no letup in sight. Dealerships need to pay more to attract good salespeople.
Yet what’s puzzling is the general lack of upward wage pressure – workers demanding more money as the labor market improves and the pool of potential employees shrinks. Wages have risen just 2% over the past year and weekly wages have actually fallen in the past two months.
Some analysts contend that meager wage increases reflect a still-high number of part-time workers in the economy. Others suggest that wage gains are generally accruing to a small pool of well educated employees, many in higher-level positions.
Whatever the case, the pickup in hiring is unlikely to translate into much faster U.S. growth unless wages also start to rise, especially with higher inflation eating away at worker paychecks.