When Hunting for a New Job, Research Shows Industry Matters
In an increasingly gig-based labor market, the jump from part-time to full-time work or vice versa can have powerful effects on overall U.S. wage growth.
The U.S. economy is doing quite well, overall. Growth is strong across a number of metrics, and workers have more jobs available today than ever before. Yet, when broken down beyond national-scale averages, the picture looks far more complex. Workers are facing wildly different outcomes based on their industry and level of employment — and those pressures are changing their distribution through the economy.
That's one of the findings of the ADP Workforce Vitality Report (WVR), which analyzes U.S. wage growth throughout the fourth quarter of 2017. Overall wages grew by 2.0 percent — but that single number can't encompass the complexity of the situation. This quarter's WVR shows that the prospects for workers can be very different for full-time and part-time workers and that, at least in the short term, loyalty to one's job only really pays off for some.
Basic Findings for the Fourth Quarter of 2017
Overall, the wage growth that was observed was concentrated among new and returning full-time workers, showing that more stable salaried jobs are still the most lucrative overall type of position. Full-time workers who kept their jobs saw their wages go up by 4.3 percent, while those who switched from one full-time position to another saw their wages increase by a slightly higher average of 4.9 percent. On the other hand, part-time workers whose jobs offer much variability in wages, have no real incentive to job hunt; part-time workers who kept their jobs saw wages increase by a respectable 3.9 percent, while part-time to part-time job switchers gained only 2.1 percent over that same period.
Job holders generally saw hourly wage levels about $10 higher than job switchers, though job switchers also show more improvement, year over year.
However, all these figures vary greatly by industry. Part-time to full-time job switchers in the construction business saw relatively anemic wage growth of 2.3 percent, while the same workers in trade and transportation saw a whopping 13.1 percent wage growth.
Compared With Historic U.S. Wage Growth
Overall, these trends track fairly closely with history, though in general job switchers have lost a bit of momentum over the past several years relative to their more stable coworkers. This of course breaks down in more specific ways across different industries, with resources and mining in particular showing great enough volatility to defy any sensible trend analysis. The growth observed in the fourth quarter of 2017 was very reminiscent of that seen in the fourth quarter of 2016: strong but also indicative of anxiety among workers, as seen through the general shift away from more tenuous, part-time positions.
The vast majority of those entering the full-time workforce from a part-time position saw huge gains as a result, but some industries like construction bucked this trend by showing markedly lower wage growth for those entering full-time work than those who simply stayed in their part-time position (3.6 percent). This is likely explained by the fact that these industries have struggled overall, leading part-time workers willing to take smaller than normal increases in pay in exchange for the security of regular work. Those in stronger industries have less incentive to accept such offers, and thus the offers tend to be sweeter by necessity.
What These Numbers Show
In general, these numbers show the increasingly tenuous position of part-time workers. Full-time workers, whose labor is still in demand, can shop themselves around to great effect, while part-time workers have a much greater interest in holding on to whatever job they can get. Jobs that do not require specialized skillsets generally do not need to beat one another on employment terms, and so they do not. On the other hand, part-time workers who made the switch into more lucrative full-time work were finally able to sell their labor at a premium, and experienced an enormous 8.7 percent wage growth over their previous positions, as a result.
Given all this, it can't be surprising that full-time work is in high demand, despite its greater imposition on workers' lifestyle versus part-time work. Wage growth, overall, is strong, but that prosperity is disproportionately enjoyed by those with the most secure positions within the economy. That security allows workers to trade their labor more aggressively, and demand greater returns on it for themselves.
As Forbes notes, "You can never assume that just because you are working now, your job is secure." The current U.S. wage growth statistics show that workers around the country really should take this advice to heart.
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