American Cities Where Wages Are Soaring

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The average wage of a U.S. worker was $1,000 per week in the fourth quarter of 2012, or 4.7% higher from the same time in 2011, according to the Bureau of Labor Statistics (BLS). In some areas, pay rose than 10%.

In the San Francisco metropolitan area, the average wage grew by nearly 25%, more than any area in the country. Based on the BLS Quarterly Census of Employment and Wages, these are the cities with the biggest increases in pay.

In an interview with 24/7 Wall St., BLS Chief Regional Economist, Martin Kohli, noted that some of the metro areas with robust wage growth are relatively small, and the increase in average weekly wage in these places may be the result of “outliers, such as unusually large bonuses at a particular firm.”

In other cities, however, there appears to be a single industry that is behind the significant change in the average wages. For example, in Midland and Odessa, Texas, and Cheyenne, Wyoming, wages likely increased because of strong growth in the oil industry. In the two Texas cities, the mining, logging and construction industry, which includes oil-related employment, jobs grew by roughly 15% in each.

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Moreover, “wages in natural resources and mining rose at a stronger-than-average rate of 6.1 percent over the year,” Kohli said, further pushing pay higher. This means that not only are jobs being added to the already high-paying industries and sectors, but these industries and sectors also are increasing pay, thereby amplifying the overall effect on wages.

In some of the cities where wages increased the most, growth appears to be the result of a single large business moving to the area. The obvious example of this is the San Francisco metropolitan area, where the one-year wage growth was more than double that of any other metro in the country.

The reason behind that growth is likely the social media company, Facebook Inc. (FB), which moved its headquarters from Palo Alto to Menlo Park at the end of 2011. Menlo park is in San Mateo County, which is in the San Francisco metro area. While other counties in the San Francisco area all grew less than 10%, in San Mateo, the average weekly wage grew more than 100%.

Based on the BLS quarterly census of employment and wages, 24/7 Wall St. reviewed the 10 metropolitan statistical areas with the biggest increases in average weekly wages between the fourth quarter of 2011 and the fourth quarter of 2012. 24/7 Wall St. also reviewed changes in employment by job sector and unemployment rates, both from the BLS, between December 2011 and December 2012.

These are the American cities where wages are soaring.

10. Topeka, Kan.
> 1-yr. wage growth: 8.1%
> Average weekly wage: $823
> Dec. 2011 unemployment: 6.1%
> Dec. 2012 unemployment: 6.0%
> 1-yr. employment change: +0.9%

The average weekly wage in the Topeka area grew 8.1% between the fourth quarter of 2011 and the fourth quarter of 2012 to $823. Wages grew consistently each year since they were an average of $730 in the fourth quarter of 2008. Over the past several years, the food industry has been growing at a steady clip, with companies such as Frito-Lay and Del Monte adding jobs. Still, the unemployment rate in the Topeka area was 6% in December 2012, nearly unchanged from the same month in 2011.

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9. Dalton, Ga.
> 1-yr. wage growth: 8.2%
> Average weekly wage: $769
> Dec. 2011 unemployment: 12.5%
> Dec. 2012 unemployment: 11.0%
> 1-yr. employment change: -0.2%

Workers in the Dalton metropolitan area received an average raise of $58 a week from the fourth quarter of 2011 to the fourth quarter of 2012, an increase of 8.2%. Before 2012, fourth-quarter average weekly wages had been dropping since 2009. Dalton has experienced some growth in generally higher-paying industries of late. Government jobs rose 6% in the area between December 2011 and December 2012, while professional and business services jobs rose 5.1%.

8. Elkhart-Goshen, Ind.
> 1-yr. wage growth: 9.1%
> Average weekly wage: $782
> Dec. 2011 unemployment: 10.9%
> Dec. 2012 unemployment: 9.5%
> 1-yr. employment change: +5.5%

The average weekly wage in Elkhart rose $65 between December 2011 and December 2012, when pay climbed to $782 per week. The Elkhart area was hit hard by the most recent economic downturn as demand for its key industry, RV manufacturing, plummeted. The unemployment rate hit a high of 20.2% in March 2009. However, the area’s manufacturing base, which comprises nearly half of all the area’s jobs, has been making a significant comeback, growing employment 7.4% from December 2011 to December 2012. Some of the area’s RV plants have announced plans to continue hiring in 2013.

7. Cheyenne, Wyo.
> 1-yr. wage growth: 9.5%
> Average weekly wage: $867
> Dec. 2011 unemployment: 6.8%
> Dec. 2012 unemployment: 5.6%
> 1-yr. employment change: +2.7%

Cheyenne, like much of Wyoming, has benefited in recent years from an oil boom, which brought high-paying jobs to the area. Jobs in trade, transportation and utilities — the area’s largest employment sector — rose 4.2% from December 2011 to December 2012. In addition, jobs in mining, logging and construction rose 6.9% at the same time. There were approximately 30 oil companies operating in Laramie County as of 2012, County Planner Gary Kranse told the Wyoming Eagle Tribune.


6. Odessa, Texas
> 1-yr. wage growth: 9.6%
> Average weekly wage: $1,105
> Dec. 2011 unemployment: 4.6%
> Dec. 2012 unemployment: 3.5%
> 1-yr. employment change: +8.3%

The unemployment rate in the Odessa area fell to just 3.5% in December 2012 from the already low 4.6% rate a year earlier. The low unemployment and high wage growth likely can be attributed to new oil and gas exploration jobs in the Permian Basin. And this trend likely will continue in the near future, Waco Economist Ray Perryman said in an email to the Odessa American in June. “Current levels of oil and gas activity create a situation of high labor demand on a sustained basis,” Perryman said. The number of jobs in mining, logging and construction grew 14.7% between December 2011 and December 2012, while jobs in trade, transportation and utilities grew 11.8%.

5. Provo-Orem, Utah
> 1-yr. wage growth: 9.8%
> Average weekly wage: $832
> Dec. 2011 unemployment: 5.4%
> Dec. 2012 unemployment: 4.9%
> 1-yr. employment change: +4.4%

Average weekly wages in the Provo-Orem area rose by $74 between December 2011 to December 2012 to hit $832. Several job sectors, notably high-paying ones, experienced significant employment growth between December 2011 and December 2012. The number of jobs in mining, logging and construction rose 17.4% in that time, while the number of jobs in professional and business services rose 7.5%. The Milken Institute listed the Provo-Orem area as seventh among the “Best Performing Cities 2012,” looking at a host of different factors including job growth, wage growth and the presence of high-tech industries.

4. Fond du Lac, Wisc.
> 1-yr. wage growth: 10.6%
> Average weekly wage: $811
> Dec. 2011 unemployment: 6.4%
> Dec. 2012 unemployment: 6.1%
> 1-yr. employment change: +1.3%

Fond du Lac was one of just four metropolitan areas across the country where average weekly wages in the fourth quarter of 2012 rose more than 10% compared to the same time in 2011. The manufacturing sector, which was the area’s largest employer, was also its largest growing sector between December 2011 and December 2012, with employment rising 5.2%. The unemployment rate in the Fond du Lac area was 6.1% in December 2012, an improvement from the 6.4% rate in the same month in 2011.

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3. Midland, Texas
> 1-yr. wage growth: 11.1%
> Average weekly wage: $1,261
> Dec. 2011 unemployment: 3.7%
> Dec. 2012 unemployment: 2.9%
> 1-yr. employment change: +8.3%

The average wage in the Midland metropolitan area was a very high $1,261 per week in the fourth quarter of 2012, a jump of $126 from the same time in 2011. Like Odessa, oil development in the Permian Basin contributed much to Midland’s strong labor market. The number of jobs in mining, logging and construction rose 16.1% between December 2011 and December 2012. In addition, jobs in trade, transportation and utilities rose 9.8% at the same time. The growth in these generally high-paying industries has forced other industries to raise wages in order to compete for labor.

2. Vero Beach, Fla.
> 1-yr. wage growth: 11.1%
> Average weekly wage: $839
> Dec. 2011 unemployment: 10.7%
> Dec. 2012 unemployment: 9.3%
> 1-yr. employment change: -0.2%

Average weekly wages in the Vero Beach area spiked by $84 between the fourth quarter of 2011 and the fourth quarter of 2012. Overall, the area’s employment figures improved, likely pushing up wages. The unemployment rate dropped 1.4 percentage points between December 2011 and December 2012. Another possible contributor to rising wages in the area was the increase in Florida’s minimum wage, which grew from $7.31 to $7.67 beginning in January 2012. The leisure and hospitality industry, whose workers were more likely to benefit from the increased minimum wage than other industries, accounted for 6,800 of the 45,900 nonfarm jobs in the area as of December 2012.

1. San Francisco-Oakland-Mateo, Calif.
> 1-yr. wage growth: 24.7%
> Average weekly wage: $1,706
> Dec. 2011 unemployment: 7.2%
> Dec. 2012 unemployment: 6.1%
> 1-yr. employment change: +4.1%

Average weekly wages in the San Francisco metropolitan area increased by nearly a quarter between December 2011 and December 2012, considerably higher than any other metropolitan area. In San Mateo County, the average weekly wage more than doubled — rising 107.3% — between the fourth quarters of 2011 and 2012, by far the highest wage growth of any county measured by the BLS. Why the big growth? During that time, Facebook moved its headquarters into the county from its previous location in Santa Clara County. The company went public in May 2012, but Facebook employees exercised roughly 51 million stock options in the fourth quarter when they were allowed to cash out shares. The average wages of the approximately 6,200 workers in “computer system design services” was $82,891 a week.

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