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Tuesday, February 20, 2024
Feb. 20, 2024

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Wages on the rise in Washington

Payroll processor ADP says annual pay up nearly 8%

By , Columbian staff writer

Washington employees’ wages are on the rise, according to a report from payroll processor ADP.

ADP National Employment Report’s Pay Insights for last month showed the state’s annual pay increased 7.9 percent compared with March 2022. The median annual pay was $60,200 as of March, with half of state salaries above and half below that amount, for workers who have been in their positions for the past 12 months, according to the report.

The increase is very near the 8 percent inflation rate that the Seattle-Tacoma-Bellevue area has seen over the past 12 months, according to the Consumer Price Index.

It’s also close to the 8.66 percent increase that the Washington minimum wage rose by in January. In addition to the minimum wage, the state’s minimum salary requirement for nonexempt employees increased to $57,293.60 per year for small employers and $65,478.40 per year for large employers.

Regional economist Scott Bailey was skeptical of the employment estimates from ADP, saying that the company’s numbers continue to differ from estimates from the Bureau of Labor Statistics.

Full-time worker wages in Washington, Bailey said, have increased faster than inflation, according to statistics from the Washington Employment Security Department. This hasn’t been true nationwide, he added.

The state’s median hourly wage in the second quarter of 2022 was $30.18, or $62,774 annually, said Bailey. It rose to $31.98, or $66,518 annually, in the second quarter 2022 — an increase of 6.1 percent. The inflation rate during that time was 6.6 percent. This data is derived from about 4 million wage records provided each quarter by employers.

“This may be because lower-wage jobs have grown faster than higher-wage jobs,” said Bailey, adding that lower-wage jobs were in general hit harder in the 2020 downturn.

“It will be higher for people who have been in their job for a year because there’s more turnover in lower-wage jobs,” noted Bailey.

Bailey said ADP’s sample is “in general not representative of the labor market as a whole.”

The company underestimated jobs through 2019, he added.

“Note that initial BLS estimates are based on a survey and so subject to sample error, but these estimates have been benchmarked to employment reports from all employers,” said Bailey. “The monthly change numbers are off, and the trend is off. The former could be forgiven if the trend was accurate, but it’s not.”

ADP’s report showed Washington was on the higher end of median annual salaries in the country, behind Washington, D.C., Massachusetts, Virginia, North Dakota, New Jersey, New York, Colorado, Maryland, Alaska and Nebraska.

ADP Pay Insights uses payroll transactions to gather its data. ADP is a major payroll processor around the nation. According to the report, its year-over-year change data is gathered from almost 10 million employees across a period of one year. Payroll data from about 17 million American jobs are used to estimate the annual pay cited, it noted.

The data includes both salary and wage employees, with salary employees making up 39 percent of the sample and wage employees making up the other 61 percent. The report tracks gross pay and uses the location of the job, not the location of the worker.