US Wage Growth Slows Slightly, Remains Historically High

The wage growth in the U.S. slowed a little in February — though it was still at “historically high” levels, The Wall Street Journal reported Friday (March 4).

The private-sector average hourly earnings, seasonally adjusted, rose by 5.1% in February year-over-year.

Annual wage gains rose above 5% in four of the past five months. Wages by comparison rose an average of 3.2% a year in the two years up to February 2020, before the pandemic shutdowns.

WSJ wrote that wage increases were “particularly strong” in industries with a surge in demand as the omicron variant wanted.

The report goes into detail on some of the increases — retail workers saw a 7.1% rise in wages, up from 5.8% in January, while transportation and warehousing wages were up 7.7%, a change from 7.1% in January. And leisure and hospitality workers’ pay rose 11.2% on the year, down from 12.6% in January.

Much of the hiring in February came from lower-paid industries like leisure and hospitality, which had 179,000 of the 678,000 new jobs added – and likely kept the average wage increases down and could show why February was a bit weaker, according to analysts.

Read more: Retail Wage War Escalates as Target Offers $24/Hour in Competitive Markets

Target has reportedly decided to boost its starting pay to as much as $24 per hour in some labor markets, PYMNTS wrote.

The retailer said it’s also looking into changing its health benefit policy, making it available to new employees working as little as 25 hours per week.

These moves, according to the report, show how competitive the market is among big retailers, as everyone vies to attract workers in the service sector.

It also shows a big change in mindset from when the $15 base pay was Target’s big move back in 2017.

“Our team is at the heart of our strategy and success, and their energy and resilience keep us at the forefront of meeting the changing needs of our guests year after year,” Target Chief Human Resource Officer Melissa Kremer said in the company’s press release.