Wage Change Insights (D)

Part
01
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Part
01

Wage Change Insights (13)

Between 2000 and 2019 the average wage increased in Oregon, Pennsylvania, and Rhode Island. An overview of factors that contributed to the increase in each state can be found below.

Oregon

  • Oregon's average wage increased between 2000 and 2019 in large part due to a low unemployment rate. Companies began raising their wages to entice applicants in an increasingly competitive job economy.
  • The state-wide minimum wage began raising yearly in 2016. This drove employers to raise wages across the board to keep up with the rising wage floor.
  • Data suggests that the growing average wage in Oregon is also due to large gains in Washington and Multnomah counties.

Pennsylvania

  • Average wages have increased in Pennsylvania because their unemployment rate has steadily dropped over the years. It is currently around 3.9%, the lowest it has ever been.
  • The Commonwealth Foundation has stated that the Tax Cuts and Job Acts played a large role in raising the average wage. This is due to businesses renewed interest in investing in the state and existing businesses raising wages in response to paying less taxes.

Rhode Island

  • One study showed that Quonset Business Park had a very high average wage, which ended up adding $4.3 billion to the Rhode Island economy.
  • The Quonset Business Park alone contributed $1.3 million in income for Rhode Island residents, increasing the average wage of the state.
  • After losing many jobs in the 2008 recession, the Rhode Island economy began to rebound in 2014, adding 45,000 jobs between 2014 and 2017, which improved the average wage.
  • Starting in 2017, Rhode Island saw a large increase of their population obtaining a college degree. Because people with a degree in Rhode Island tend to earn around 40% more than those who do not, the increase in degree holders greatly increased the average wage.
Part
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Part
02

Wage Change Insights (14)

Between 2000 and 2019, South Carolina saw growth in the manufacturing sector and slow growth in its average hourly wage while South Dakota was facing a wage gap and had mainly low-paying jobs. During the same period, Tennessee saw fast-growing occupations contributing to its average hourly wage as well as growth in the manufacturing sector.

South Carolina

Growth in the manufacturing sector

  • Between 2003 and 2015, there was a steady increase in the average hourly wage in South Dakota, moving from $14.98 in 2003 to $18.23 in 2010 and $19.97 in 2016.
  • There were increased job opportunities in South Carolina since 2011, due to growth in the manufacturing sector. Between 2011 and 2015, there was recruitment for 28,000 manufacturing jobs which out-numbered those in Georgia and North Carolina.
  • There was a 12.7% increase in factory jobs between 2010 and 2015 which amounted to over 231,000 jobs. This also contributed to the change in the state's average hourly rate because during this time, the rate increased from $18.23 in 2010 to $19.51 in 2015.

Slow growth in average hourly wage

  • South Carolina was considered as the state that was "leading the manufacturing renaissance" as it became the top state that was exporting tires as well as passenger vehicles. Despite this however, the Bureau of Labor Statistics reported that South Carolina's average hourly rate in the manufacturing sector was $18.76 in January 2015, while there were 30 other states paying a higher rate.
  • Average hourly wages remained low during this period, especially in the manufacturing sector, because companies were also recruited to the state on the basis that the state offers a rate that is lower than the national average.
  • Another sector that sees slow growth in average hourly rate is education, when compared with other states. A proposal was recently made to have a 7% increase in their average pay for public school teachers which "would push the state above the Southeastern average for the first time in seven years".
  • The average salary would increase from approximately $52,917 to $56,621 (i.e. about $27.56 — $29.49 average hourly wage) and would require $211 million from the state to make it happen. The reason for this proposal is to ensure that teachers are adequately compensated.
  • The minimum wage for South Carolina is $7.25 per hour and was last increased by $0.70 in 2008 (i.e. $6.55 to $7.25) because of Consumer Price Index, causing the rate to increase along with inflation.

South Dakota

Wage gap

  • In 2000, South Dakota's average annual pay had a 29% wage gap/difference when compared with the U.S. average as a result of "lack of urban density", level of education, low tax burden and low unionization rates. This was found in a study that was conducted by Ralph Brown, who was a professor of economics at the University of South Dakota.
  • In 2010, employees in the private industry earned $16.53 per hour. The Department of Labor found that South Dakota's average hourly wage was the lowest in the U.S.
  • The rate reported then was considered unmoved for decades even though there were "state initiatives, studies and investment" implemented to improve it.
  • Between 2013 and 2014, there was a 5.4% wage growth, there was a 3.6% increase in 2015 – 2016 and a 2.8% increase between 2016 and 2017.
  • In 2017, the median hourly rate was $15.55 in South Dakota, compared with $18.12 for the U.S. The state however, saw a steady increase in the median hourly wage, but the growth was slowing.

Mainly low-paying jobs

  • In 2019, growth in South Dakota's average hourly wage was being hampered by the state's rural nature, limited manufacturing employers, and lack of highly educated workers. The state is also not very attractive to high-tech employers and workers aren't able to demand higher pay because of low union membership.
  • The state has a lot of available jobs that are low-paying and are unfortunately, the types of jobs that dominate the state. These include "office support, food service and sales"; this causes brain drain because those who are highly educated/qualified migrate to other states for better paying jobs.
  • There has been little to no improvement in attracting new employers or pay for workers, "over the past few decades". South Dakota had the lowest average hourly wage in 2008 and since then, it has only managed to move up by two spots.
  • The minimum wage for South Dakota is $9.30 per hour and was last increased by $2.75 in 2008 (i.e. $6.55 to $9.30) because of Consumer Price Index, causing the rate to increase along with inflation.

Tennessee

Fast-growing occupations

  • In 2016, all occupations in Tennessee saw an increase of $0.30 per hour, raising the average hourly wage from $19.55 to $19.85.
  • This was influenced by the fast growing occupations, healthcare practitioners as well as technical occupations, that pay $31.75 as the average hourly wage.

Growth in the manufacturing sector

  • Between 2017 and 2019, the manufacturing and construction industries saw positive growth with the latter contributing at least 4,000 jobs.
  • The state also saw a record high in employment of 3.1 million people and growth in the average hourly wage in manufacturing by $0.32 between 2018 and 2019, amounting to $20.18. This was still 7.4% below the average factory wage in the U.S. ($22.03/hr).
  • For 2019, it was anticipated that the manufacturing industry would "be the fourth largest employment sector in Tennessee, comprising 352,610 jobs" and earning $1,084 as average weekly wages.
  • The minimum wage for Tennessee is $7.25 per hour and was last increased by $1.67 in 2008 (i.e. $5.58 to $7.25) because of Consumer Price Index, causing the rate to increase along with inflation.

Research strategy

To provide insights into the reasons for changes in average wages between 2000 and 2019 in South Carolina, South Dakota and Tennessee, we leveraged government databases (e.g. Tennessee Department of Labor & Workforce Development). However, we found general information about the minimum wage for the states and some information relating to the average hourly wage.

We also looked for reports of increases or decreases in the average hourly wage for each state using respective state news publications (e.g. South Dakota News Watch) but while we found information about the changes in average wages statewide, for Tennessee and South Carolina, we mostly found information highlighting specific industries such as manufacturing and education. We also looked at other news publications (e.g. Capital Journal and Argus Leader) that reference government press releases or data and/or studies conducted by experts in the area of economics that also looked at the historical changes in average wages. While we found additional information, it remained that more information about some sectors was available rather than across all occupations for South Carolina and Tennessee. We were able to identify and synthesize insights that point to reasons for the changes in average wages between 2000 and 2019, using these highlights and group them with appropriate themes.
Part
03
of four
Part
03

Wage Change Insights (15)

Between 2000 and 2019, average wages increased in Texas, Utah, and Vermont. An overview of factors that contributed to these increases, for each state, can be found below.

Texas.

Utah.

Vermont.


Part
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Part
04

Wage Change Insights (16)

Virginia's average wages grew steadily due to high demands for labor. Washington State's average annual wages grew due to the higher-than-average minimum hourly wages in the state. West Virginia's growth in average wages was unimpressive because the state is struggling with uneven recovery and reliance on volatile sectors.

Virginia

  • Virginia's average wages grew steadily from $35,172 in 2000 to $68,055 in 2019. The increase can be attributed to the growth in the state's Gross Domestic Product from about $346.16 billion in 2000 to about $476.39 billion in 2018.
  • Virginia's unemployment rate has also been dropping in the past decade. In 2010, unemployment stood at 7.1% in the state but it dropped to less than 2.8% in 2019.
  • As of November 2019, the state had the "fourth-lowest unemployment rate" in the country at 2.6%, down from seventh-lowest in 2018. A drop in unemployment levels leads to a higher demand for labor that usually results in higher wages. The BLS announced that the weekly average salary in Virginia rose by 3.7% between 2018 and 2019, which experts attribute to competition for labor.

Washington

  • Washington State's average annual wages have shown an incremental growth in the past two decades to reach $65,274 in 2019.
  • Washington's growth in wages can be attributed to the higher-than-average minimum hourly wages in the state. In 2014, Seattle passed a legislation that set the minimum hourly wage at $15 against the federal minimum of $7.25.
  • Washington State's minimum hourly wage is also higher than the federal minimum at $12 per hour.
  • While the state's average wage has been growing for years, it recorded a 5.5% growth between 2017 and 2018, the biggest since 2006. The growth in average wage in Washington State was attributed to an 8% growth in total earnings, which recorded a $15.8 billion increase within the period.

West Virginia

  • West Virginia's average annual wages have grown between 2000 and 2019, but by a lower margin than most other states. Notably, the state's the average annual wage of $47,399 was lower than the national average of $48,672.
  • According to experts, the state's economy is struggling with uneven recovery with growth in several areas, and no improvements in some. Job growth is also disproportionately distributed with higher concentrations in the Northern West Virginia.
  • The state also relies heavily on the natural gas and construction industries, both considered volatile and unreliable by experts.
  • It is the general opinion in several publications that "economic growth has been relatively slow for the most part" in Virginia. However, the state is likely to see a growth in average wages as hourly wages improve and key sectors rebound.
Sources
Sources