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Jobs In Low-Wage Industries Are Still Rising Faster Than Jobs In High-Wage Ones

Jun 10, 2014, 03:06 IST

Lots of people are saying wage growth may be about to turn.

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Today, UBS' Maury Harris brings us this simple chart that subtracts the rate of jobs growth in low-wage industries from the jobs growth rate in high-wage ones.

Anything greater than 0 means growth in high-wage industries is up. If it's less than zero, then low-wage industry jobs growth is up.

And we've been in less-than-zero territory for about the past two years. Harris:

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Over the first two months of Q2, private sector hours worked have risen at a 4.1% annual rate-in the neighborhood of our 5.0% forecast for Q2 annualized real GDP growth. Purchasing power is improving, with payroll earnings so far in Q2 rising at a 5.4% annual rate versus 4.0% in Q1 and 3.6% in Q4.

That improved purchasing power reflects past job growth and is coming despite some deteriorating incremental job quality, as jobs in low-wage industries are rising faster than jobs in high-wage industries.

Chart:

UBS

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