In July, workers got another raise — but some benefited more than others

In July, workers got another raise — but some benefited more than others
A now hiring sign at McDonald's restaurant in Yorba Linda, CA, on Monday, Sept. 13, 2021 offering pay from $15 an hour for new employees.Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images
  • Average hourly earnings rose 15 cents from June to July, according to new data from the Bureau of Labor Statistics.
  • That means wages grew 5.2% year over year, same as the year-over-year growth in June.

Workers got a big raise in July — and they made even more in June than it originally seemed.

That's according to the latest data from the Bureau of Labor Statistics on the country's employment situation, which found that average hourly earnings increased by 15 cents in July, after increasing by 14 cents in June.

"Wage growth is still very hot," Daniel Zhao, lead economist at Glassdoor, told Insider, with average earnings standing at $32.27 an hour in July.

Nick Bunker, economic research director at Indeed Hiring Lab told Insider that "nominal wage growth is still quite strong," adding that "there's some thought that maybe it might decelerate a little bit, but we haven't seen that yet."

Year-over-year average wage growth for private employees was 5.2% in both June and July. As seen in the chart, year-over-year wage growth has been strong in general in recent months.


"American workers haven't seen wage growth like this in well over a decade, maybe a couple decades," Secretary of Labor Marty Walsh told Insider. "So, at the end of the day, workers making more money is good for them."

But that doesn't mean workers are feeling their wallets growing, with inflationary pressures "not letting workers see those benefits right now," Walsh said. Inflation has run even hotter than wage growth this year, and after accounting for soaring prices, most workers have seen their purchasing power decline.

"We just need to continue to do everything we can to bring down those inflationary costs that people are experiencing," Walsh said.

Wage growth varies by industry, where some saw year-over-year growth in July of over 5%, such as in construction and utilities.

Leisure and hospitality, an industry that is still making its way back to pre-pandemic employment levels, saw wage growth of 8.7% year-over-year in July. Education and health services also saw strong year-over-year wage growth of 6.0%.


"We are seeing wage growth spread out to more industries, which raises more concern about inflation," Zhao said. As of June, inflation was at its highest point since November 1981 at 9.1%.

But not all sectors are seeing the same pace of wage growth. Bunker wrote on Twitter — accompanying a chart that looks at just earnings of production workers using three-month annualized data — that "the slowdown in wage gains for lower-wage industries continues." Lower-wage industries would include those that make up leisure and hospitality, for instance.

"I think what we're seeing in aggregate is that lower-wage sectors are cooling," Bunker told Insider. "It's coming down from really, really, really elevated levels of wage growth at the end of last year."

Friday's jobs report from the Bureau of Labor Statistics showed a robust monthly gain in jobs and a downtick in the unemployment rate from 3.6% to 3.5%. The US added 528,000 nonfarm payrolls in July, surpassing the 250,000 gain that economists surveyed by Bloomberg estimated.

Additionally, according to Zhao, the Fed may have liked to actually see wage growth drop as the central bank continues its battle against inflation instead of the rise that happened in July.


"I think, especially from the Fed's perspective, the Fed would love to see the opposite of what we got in today's report," Zhao said. "They would want to see rising labor force participation and falling wage growth. But instead of course we got flat wage growth and falling labor force participation."