Wage growth in Wisconsin has been slowing down this year, but inflation-adjusted personal incomes are expected to grow slightly after declining last year.
The state’s year-over-year change in annual pay was 5.6 percent in November, down from 8 percent in the same month of 2022, according to a report from ADP Research Institute.
Liv Wang, lead data scientist at ADP Research Institute, said wage growth has been elevated since the pandemic, but it’s now moving toward a “more sustainable level” as inflation cools. Wang said she anticipates wage growth will continue to slow over the next year or two.
“One of the factors is we are moving away from the pandemic effects, (and) things are cooling in the labor market,” she said. “Also, the financial environment is tightening as the (Federal Reserve) keeps raising interest rates, so employers may be preparing for the tightening situation right now.”
That slowdown has been felt across sectors in 2023, but has been especially pronounced in the leisure and hospitality industry, according to the ADP report.
The ADP report showed median wage gains in leisure and hospitality nationally far outpaced all other industries from late 2021 through 2022, peaking last March when they were 16.9 percent higher than the previous year. The next closest industry that month was trade, transportation and utilities at 8.8 percent wage growth.
This year, wage growth in leisure and hospitality slowed significantly. As of November, median wages in that sector were 6.5 percent higher than the previous year. Most other industries came in between 5 and 6 percent.