Welcome!

News Feed Item

The PayScale Index Shows Real Wages Down Almost 7 Percent Since 2006 While Corporate Profits Reach Highest Level in History

PayScale Offers Guidance to Businesses as New Predictive Analysis Forecasts Only Slight Nominal Wage Growth in Q4, Suggesting Trend of Low Real Wages Will Continue Through End of Year

SEATTLE, WA -- (Marketwired) -- 10/01/13 -- Today, PayScale, Inc. -- the leader in cloud compensation data and software for businesses and individuals -- released the Q3 PayScale Index, the latest quarterly report tracking trends in compensation. The recent survey marks the first time The PayScale Index has revealed shifts in 'real wages' by analyzing statistics from the Consumer Price Index together with PayScale's rich compensation data. The Q3 PayScale Index is also the first predictive Index; projecting only modest national wage growth of 0.1 percent in the U.S. for Q4.

"Real wage growth is a key indicator of economic health and employee satisfaction because it blends inflation together with nominal wages," said Katie Bardaro, lead economist at PayScale. "The results of our Q3 survey aren't encouraging for employees, showing real wages have actually declined over the past seven years. This means the income for a typical full-time worker buys less today than it did in 2006. We also anticipate the trend of negative to low real wage growth will continue in Q4."

The decrease in real wages comes at a time when U.S. corporate profits are at a record high. According to the Q3 gross domestic product (GDP) report from the U.S. Commerce Department, corporate earnings were up 18.6 percent over the past year and corporate profits represented the highest percentage of GDP in history.

"Wages continue to be relatively flat, even as corporate profits are dramatically increasing," said Bardaro. "Our research shows turnover increases and productivity decreases when employees feel undervalued, so we believe this is the time for businesses to reassess their compensation strategy to ensure long-term success."

In addition, PayScale research found that 59 percent of businesses felt retention was a 'main concern' as the economy rebounds, up from 28 percent in 2009. In this climate, companies should have a more balanced approach to compensation to attract and retain the right talent. PayScale recommends businesses take the following three steps:

  • Understand the real costs of under-compensating - While keeping salaries low may seem like a good approach in the short term, it can result in lost productivity from existing employees and the loss of top performers who are expensive to replace.
  • Take a measured approach to adjusting compensation - Businesses shouldn't rush to increase compensation across the board, but should instead evaluate key positions or geographic locations where the competition for talent is especially hot.
  • Remember: the economy is volatile - In our current business climate, industries and skill sets which are hot today, may be cool tomorrow. Companies should make compensation decisions based on up-to-the minute data reflecting the exact attributes of their positions or the specific professional experiences of their employees.

Key findings from The Q3 PayScale Index:

  • Nominal wages have not kept pace with inflation; real wages have dropped almost 7 percent since 2006, meaning the buying power of the average U.S. worker is lower than it was seven years ago.
  • The prediction for Q4 is only a very slight increase to nominal wages of 0.1 percent, resulting in annual wage growth of just 0.8 percent.
  • Changes in nominal wage growth for Q3 were a mixed bag, as wage growth was not seen across the board.
  • Previous high-performing industries recovered from their Q2 decline and are back on top this quarter: oil and gas exploration, biotech, and healthcare.
  • Media and publishing jobs hold the top spot for annual nominal wage growth at 3.9 percent.
  • San Francisco, Baltimore, and Seattle are the U.S. metro areas that experienced the highest year-over-year growth with more than 2.5 percent.

The Q3 PayScale Index also analyzed wage trends in the United Kingdom and Canada. Wages in the U.K. increased 9.3 percent since 2006, compared to 8.2 percent in the U.S. for the same period. The results show U.K. wage recovery has been more rapid than recovery in the U.S.

To view the entire interactive Q3 PayScale Index which reflects wage trends across various industries, company sizes and major metros, please visit: http://www.payscale.com/payscale-index.

About The PayScale Index:

The PayScale Index follows changes in total cash compensation for full-time, private industry employees in the U.S., Canada, and the U.K. Three new features were added to the regularly released PayScale Index including:

  • A forecast of the National U.S. PayScale Index for Q4 2013
  • A PayScale Real Wage Index, which tracks changes in wages adjusted for inflation since 2006
  • A national PayScale Index for the U.K.

For more information on the PayScale Index, please visit the methodology and FAQ pages.

About PayScale:

Creator of the largest database of individual compensation profiles in the world containing 40 million salary profiles, PayScale, Inc. provides an immediate and precise snapshot of current market salaries to employees and employers through its online tools and software. PayScale's products are powered by innovative algorithms that dynamically acquire, analyze and aggregate compensation information for millions of individuals in real time. Publisher of the quarterly PayScale Index™, PayScale's subscription software products for employers include PayScale MarketRate™, PayScale Insight™, and PayScale Insight Expert™. PayScale's cloud compensation software is used by more than 2,500 customers including Mozilla, Tully's Coffee, Clemson University, and the United States Postal Service. For more information, please visit: www.payscale.com or follow PayScale on Twitter: http://twitter.com/payscale.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Systena America will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Systena Group has been in business for various software development and verification in Japan, US, ASEAN, and China by utilizing the knowledge we gained from all types of device development for various industries including smartphones (Android/iOS), wireless communication, security technology and IoT serv...
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
SYS-CON Events announced today that Infranics will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Since 2000, Infranics has developed SysMaster Suite, which is required for the stable and efficient management of ICT infrastructure. The ICT management solution developed and provided by Infranics continues to add intelligence to the ICT infrastructure through the IMC (Infra Management Cycle) based on mathemat...
SYS-CON Events announced today that Carbonite will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Carbonite protects your entire IT footprint with the right level of protection for each workload, ensuring lower costs and dependable solutions with DoubleTake and Evault.
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 21st International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo Silicon Valley Call for Papers is now open.
SYS-CON Events announced today that HTBase will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. HTBase (Gartner 2016 Cool Vendor) delivers a Composable IT infrastructure solution architected for agility and increased efficiency. It turns compute, storage, and fabric into fluid pools of resources that are easily composed and re-composed to meet each application’s needs. With HTBase, companies can quickly prov...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
SYS-CON Events announced today that Hitachi Data Systems, a wholly owned subsidiary of Hitachi LTD., will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City. Hitachi Data Systems (HDS) will be featuring the Hitachi Content Platform (HCP) portfolio. This is the industry’s only offering that allows organizations to bring together object storage, file sync and share, cloud storage gateways, and sophisticated search and...
This talk centers around how to automate best practices in a multi-/hybrid-cloud world based on our work with customers like GE, Discovery Communications and Fannie Mae. Today’s enterprises are reaping the benefits of cloud computing, but also discovering many risks and challenges. In the age of DevOps and the decentralization of IT, it’s easy to over-provision resources, forget that instances are running, or unintentionally expose vulnerabilities.