All the talk about stagnant wages may have employers thinking they can keep position salary ranges the same. Unfortunately, that thinking will make it difficult to hire and retain workers.
Wages have been steadily increasing.
According to the U.S. Bureau of Labor Statistics (BLS), the average weekly earnings of all employees on nonfarm payrolls in the private sector increased 25.9 percent from April 2007 to April 2017.
Monthly figures point to occasional dips during the recession, as well as months with essentially no gains. However, the overall trend has been higher salaries.
How It Plays in Peoria
A recent report from Chicago-based firm RCF Economic & Financial Consulting examines population and employment in Illinois from 2013 to 2016. The report looks at activity in only one state, but this state provides a snapshot of the U.S. heartland.
The RCF report and its related data reference per capita income, which is calculated by dividing the area’s total income by its total population, where BLS findings are based on salary averages.
The report finds that despite losing population, Illinois has gained employment and seen improvement in per capita income.
From 2013 to 2016, the population of Illinois declined by 0.6 percent, compared with an overall U.S. population increase of 2.2 percent. The state’s population losses have been widespread: 91 of Illinois’s 102 counties have seen a decline in population during the three-year period.
Despite the population losses, Illinois added 200,000 jobs from 2013 to 2016. Although much of the job growth has been in the Chicago area, 79 of 102 counties saw an increase in employment.
The combination of increased employment and decreased population has resulted in an increase in the proportion of the state’s residents who are employed. Indeed, employment-to-population ratio in Illinois has grown more rapidly than for the nation as a whole.
At the same time, the increase in the proportion of the state’s population that is employed has contributed to an 11.7 percent increase in per capita personal income from 2013 to 2016.
RCF notes that while many people have left Illinois, the economic conditions of those who remain are much better than commonly believed.
Other Midwest States
Data from the U.S. Bureau of Economic Analysis for other Midwest states show double-digit income growth is not isolated to Illinois.
For the same three-year period, 2013 to 2016, Michigan saw a 13.1 percent increase in per capita growth; Indiana, 11.1 percent; Wisconsin, 10.6 percent; Ohio, 10.3 percent; and Minnesota, 10.3 percent.
These numbers suggest the heartland has made progress as far as salary growth.
Adding It Up
Employers that wish to remain competitive in order to attract candidates and retain workers will want to consider these findings.
In fact, if you haven’t done so recently, you’ll want to take a look at salary ranges for all positions at your company.