Fourth quarter U.S. wage growth increased 4.4 percent. Wage growth for both job holders and job switchers hit all-time highs of 5.9 percent and 8.0 percent respectively, according to the ADP Research Institute® Workforce Vitality Report (WVR) released today.

In fact, wage growth for Generation Z (24 years old and younger) job holders saw the largest wage gains in December 2021 at 13.1 percent. Employment growth increased by 5.0 percent in December 2021. 

ADP_Yearly_Wage_and_Employment_Growth
(Photo : ADP)

READ NEXT: Unemployment Rate Drops Below 5 Percent, Wages Rise for US Workers 

"ADP data showed U.S. wage growth increased 4.4 percent on average for all workers in December 2021, with job switchers and younger job holders who saw the largest wage growth," said Nela Richardson, chief economist, ADP. "Leisure and hospitality, which experienced the greatest job loss due to the pandemic, was a notable exception to this overall trend. While leisure and hospitality led employment gains in the first half of 2021, it is the only industry where job switchers' wages were basically flat on average in December 2021 compared to previous year."

Employment growth year-over-year increased 5.0 percent, with all sectors experiencing employment growth. While leisure and hospitality led the way with a 17.7 percent increase, overall employment levels for the sector remain below their high-water mark prior to the pandemic. However, wage growth for job holders and job switchers was the strongest in industries including professional business services (12.2 percent) and information technology (12.2 percent).

Table 1: Wage and Employment Growth by Industry - December 2021

Industry

  

YOY Wage Growth

Yearly Growth

All

All

Holders

 Entrants 

Switchers 

Employment Growth

Switching Rate

-ALL-

$31.53

 4.4%

5.9%

3.0%

8.0%

5.0%

22.0%

Construction

$31.56

 4.1%

6.1%

4.7%

7.3%

4.5%

16.0%

Education and Health Services

$29.67

 3.6%

5.5%

3.6%

5.0%

3.6%

20.5%

Finance and Real Estate

$36.90

 3.8%

5.4%

0.2%

9.9%

1.4%

17.1%

Information

$46.92

 6.5%

6.0%

6.0%

12.2%

1.8%

18.3%

Leisure and Hospitality

$19.38

 2.1%

6.7%

4.5%

0.4%

17.7%

29.4%

Manufacturing

$32.71

 3.9%

6.0%

6.8%

8.7%

3.2%

18.4%

Other Services

$26.24

 2.2%

5.1%

-0.7%

5.7%

5.4%

15.5%

Professional and Business Services

$40.56

 6.2%

6.4%

7.5%

12.2%

3.9%

25.4%

Resources and Mining

$36.11  

-10.3%

5.2%

0.0%

8.8%

9.5%

5.1%

Trade, Transportation, and Utilities

$27.88

8.4%

6.8%

-1.6%

5.7%

3.4%

24.1%

Across the U.S., all regions experienced wage growth over 3.0 percent. While job switchers saw record-setting wage growth, job switchers in the West and Northeast received the biggest gain at 9.2 percent and 9.0 percent. By firm size, midsized companies with 500 to 999 employees increased wages the fastest, up 9.1 percent in December 2021 from one year prior.

Table 2: Wage and Employment Growth by Region and Firm Size - December 2021

Region

  

YOY Wage Growth

Yearly Growth

Wages  

All

 Holders

 Entrants

 Switchers

 Employment   Growth

Switching Rate

-USA-

$31.53

4.4%

  5.9%

3.0%

8.0%

5.0%

22.0%

MIDWEST

$29.23

4.1%

  5.9%

3.7%

7.2%

3.7%

20.9%

NORTHEAST

$35.55

3.8%

  5.5%

2.9%

9.0%

5.6%

22.6%

SOUTH

$29.21

4.6%

  5.9%

1.7%

7.1%

4.5%

22.4%

WEST

$34.31

4.7%

  6.1%

4.0%

9.2%

6.7%

22.1%

Company Size

      

-ALL-

$31.53

4.4%

 5.9%

3.0%

8.0%

5.0%

22.0%

49 or less

$28.43

2.5%

 5.1%

3.8%

6.0%

4.8%

17.8%

50 to 499

$31.67

4.7%

 6.1%

5.3%

8.1%

3.7%

23.5%

500 to 999

$32.68

5.9%

 6.3%

5.7%

9.1%

5.8%

21.8%

1000 or more

$33.07

4.9%

 6.1%

1.1%

8.3%

5.8%

24.0%

Wage gains for job switchers saw tremendous increases overall, with double digit increases for job switchers in industries including finance, information technology and professional business services with an average wage of $18.04 for females and $19.66 for males.

Table 3: Wage and Switching Rate by Industry and Gender - December 2021

Industry

Gender

 Share

 Switching
 Rate

 Switching
 Wage

 Switchers'
 Wage
 Growth

ALL

Female

48%

23.00%

$29.08

8.07%

Male

52%

21.15%

$34.41

7.88%

Construction

Female

21%

16.56%

$28.93

5.98%

Male

79%

15.88%

$31.32

7.58%

Manufacturing

Female

31%

20.03%

$38.13

9.89%

Male

69%

17.62%

$37.47

8.13%

Finance & Real Estate

Female

54%

16.90%

$31.83

9.74%

Male

46%

17.24%

$43.08

10.30%

Information

Female

38%

18.90%

$50.16

12.70%

Male

62%

17.97%

$55.84

12.15%

Professional & Business Serv

Female

46%

26.99%

$39.15

12.58%

Male

54%

24.17%

$49.32

12.13%

Education & Health

Female

75%

21.08%

$24.76

4.57%

Male

25%

18.56%

$31.86

6.13%

Leisure & Hospitality

Female

49%

29.40%

$18.04

-1.38%

Male

51%

29.44%

$19.66

1.80%

Trade, Transportation & Utilities

Female

39%

26.07%

$24.66

7.37%

Male

61%

22.83%

$27.64

4.77%

Across all age groups, wage growth was strongest among workers 24 years old and younger at 6.8 percent in December 2021. In contrast workers over 55, saw wage gains at just 2.7 percent. Wage gains for females outpaced male wages in December 2021, albeit from a lower base. 

Table 3: Wages by Gender and Age - December 2021

   

24 or less 

 25 to 34

  35 to 54 

 55 or more 

 -ALL-

Wage Growth

-ALL-

 6.8%

 5.9%

 4.1%

 2.7%

 4.4%

Female

 7.1%

 7.4%

 5.7%

 3.3%

 5.7%

Male

 6.6%

 4.5%

 3.0%

 2.3%

 3.4%

Job Holder Wage
Growth

-ALL-

 13.1%

 9.2%

 5.6%

 3.5%

 5.9%

Job Switcher Wage
Growth

-ALL-

 7.3%

 11.6%

 9.4%

 4.8%

 8.0%

Wage Level

-ALL-

 $16.89

 $27.19

 $35.61

 $35.69

 $31.53

Female

 $16.05

 $26.03

 $31.65

 $29.68

 $28.00

Male

 $17.70

 $28.17

 $38.78

 $40.35

 $34.44

Employment
Growth

-ALL-

 7.2%

 2.4%

 4.5%

 7.7%

 5.0%

Female

 8.0%

 1.6%

 4.2%

 8.0%

 4.9%

Male

 6.4%

 3.2%

 4.8%

 7.4%

 5.2%

Males Earning More

  

 10%

 8%

 23%

 36%

 23%

About the ADP Workforce Vitality Report

The ADP Workforce Vitality Report (WVR) was developed by the ADP Research Institute. It is an unprecedented, in-depth monthly analysis (published quarterly) of the vitality of the U.S. labor market based on actual data that identifies labor market trends and dynamics across multiple dimensions. 

These dimensions include employment growth, job switching, wage growth and hours worked.  In addition to the macro data presented in the report, there are also segment-specific findings by industry, state, gender, age, experience, and pay level. 

Established in October 2014, the report methodology was updated in April 2018 utilizing monthly data to include additional data points and deeper insights.  For more information about the report, please visit https://workforcereport.adp.com/. 

Type of Workforce

Holders: Workers who were employed by the same company for the past 12 months.  The wage growth is the rate of change in wages in that time period.

Switchers: Workers who changed employers between consecutive months.  The wage growth is calculated from the 12-month moving average of wage growth.

Entrants: First time workers who are less than 25 years old.  The wage growth is calculated from the 12- month moving average of wages.

To see detailed results from the ADP Workforce Vitality Report for December 2021, including data broken down by region, firm size, industry, gender, and age visit https://workforcereport.adp.com/.  

READ MORE: Hispanics Increasingly Entering US Workforce But Wages Remain Stagnant