The PayScale Index Falls: A Bump in the Road to Recovery?

Seattle, WA (PRWEB) April 09, 2013

PayScale, Inc. today released The PayScale Index for Q1 2013, which tracks quarterly trends in compensation.

After three straight quarters of rapidly rising wages across almost every industry, job category and company size, Q1 2013 brought the first wage decreases since early 2011. However, decreases were minor and wages are still up year-over-year across the board. For the first time in the history of the The PayScale Index, the food services and accommodation industry came out on top with the highest quarterly growth. Wages in this industry grew by 1.4 percent, which was the largest quarterly growth of any measure of The PayScale Index.

Building upon the current political and economic climate, this quarter was a bump in the road to recovery, as wages fell in previously high-performing areas including IT, Biotech, and Oil & Gas Exploration. It remains to be seen if this quarterly drop is a blip on the radar, or a long-term trend, said Katie Bardaro, Lead Economist, PayScale.

Q1 2013 PayScale Index highlights for the United States and Canada include:

A setback in the mining, oil and gas exploration industry had geographical consequences as well. The 0.4 percent decrease in wages in this industry likely drove the 0.1 percent wage drop in the Houston metro area, the largest drop this city has seen since mid-2010.
Tech hotspots cooled off. Cities with a strong tech presence that were previous wage winners were wage losers this quarter. Wages in Boston, Minneapolis, and Seattle fell this quarter (0.7 percent, 0.4 percent and 0.2 percent respectively). Wages in San Francisco softened with a quarterly growth of 0.7 percent compared to previous quarters of more than 1 percent.
Biotech was the hardest hit of any tech job family. Here, wages fell by more than 1 percent this quarter, compared to IT, where wages simply slowed their growth to 0.2 percent, and architecture and engineering, where wages dropped by a mere 0.1 percent.
Wage decreases in the manufacturing industry and job category reflect other economic reports. Information released by the Institute for Supply Management, which tracks manufacturing activity, found that the manufacturing sectors expansion slowed in March. This matches our findings that wages decreased by almost 1.0 percent for the job category and 0.4 percent for the industry overall in Q1 2013.
Small businesses gave out the only wage increases across different company sizes. Wages in Q1 2013 grew by 0.3 percent for small companies, but fell by 0.2 percent for medium companies and fell by 0.5 percent for large companies. For the first time, small company wage growth since 2006 overtook large company wage growth.
Calgary, Alberta experienced a slight bump in their wage growth this quarter; they are tied for second with Edmonton for top annual wage growth (3.4 percent). No surprise there as these are both oil towns, which is an industry that has experienced tremendous wage growth over the last few years.
As the financial center of Canada, Toronto experienced relatively strong wage growth in Q1 (2nd among Canadian metros). This is no surprise as the financial sector continues to experience a boom in wages overall.

Adds Bardaro: Although the growth for small companies was muted this quarter, they have experienced strong wage growth over the last few quarters and are still tops for annual growth with 5.5 percent (compared to less than 3 percent for medium and large companies). This wage growth for small companies is largely driven by two factors: 1) their competition with larger firms for top talent and 2) their ability to react and respond to labor market trends in a more fluid and immediate way.

About The PayScale Index

The PayScale Index follows changes in total cash compensation for full-time, private industry employees in the United States and Canada. In addition to a US national index and a Canadian national index, it includes separate indices for the following:

15 private industries in the U.S. as defined by the North American Industry Classification System (NAICS)
20 largest U.S. metropolitan areas, as defined by the Office of Management and Budget (based on the July 1, 2009 population estimates by the United States Census Bureau).
Three company sizes in the U.S.: small (under 100 employees), medium (between 100 and 1,500 employees) and large (greater than 1,500 employees).
19 U.S. job categories, as defined, in part, by the Standard Occupational Classification (SOC) system.
Six largest Canadian metropolitan areas, as defined by the Standard Geographical Classification (based on the July 1, 2010 population estimates by the Canadian Census).

The PayScale Index utilizes a unique approach to trend measurement. Unlike indices such as the Consumer Price Index, which measures the prices of certain goods and services (periodically updated to reflect changes in buying habits of Americans), The PayScale Index uses data on all private-sector, full-time employees working in a given time period.

PayScale has performed a detailed analysis of how various compensable factors, like work experience, education, employment setting and job responsibilities affect pay. This analysis is based on PayScale’s extensive data of more than 36 million employee profiles, accounting for 250 compensable factors for more than 14,000 unique job titles, which show how the pay of actual workers varies with each of these factors.

About PayScale

Creator of the largest database of individual compensation profiles in the world, 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 search and query 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 and PayScale Insight. Among PayScale’s 2,500 corporate customers are organizations small and large across industries including Mozilla, Tullys Coffee, Clemson University and the United States Postal Service. For more information, visit

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