Pay gains for U.S. workers have been slowing steadily since the second half of 2022 as the economy works its way to a post-pandemic normal. But pay and hiring dynamics at the metro level can look very different than the national data tracked by ADP’s Pay Insights report and National Employment Report.
For Main Street businesses, job-hunters, and others, localized data can be valuable. Take, for example, our recent report that combined metrics on pay, hiring rates, and the local cost of living to help college graduates find the best places to look for a job.
Using a similar approach, we ranked U.S. employment hubs by pay growth, starting wages for new hires, and the hiring rate, focusing on 55 U.S. metros with populations of at least 1 million.
We observed total gross pay for individual workers, which includes overtime, tips, bonuses, and commissions in addition to salary and hourly wages. That information is compared to data from the preceding 12 months to calculate the year-over-year change in pay for each individual who had been observed in the same month of consecutive years. These matched individuals include both job-stayers and job-changers, yielding a sample of some 15 million workers in June 2024.
But tracking pay isn’t enough. To stay competitive in the labor market, employers also need to keep up to date with wage-setting strategies for new hires. We identified as many as 1.2 million new hires each month and tracked their starting base hourly wages from July 2023 to June 2024.
Finally, a person needs to be hired before they can get paid. To measure local demand for labor, we tracked hiring rates by calculating the number of new hires as a share of monthly total employment between July 2023 and June 2024.
How metros stack up
Higher pay growth, higher starting wages for new hires, and higher hiring rates are associated with strong labor markets. Taking the three together, we calculated each metro’s percentile rank on each of those data points, then ranked them using the geometric mean of the three metrics.
The takeaway
The U.S. labor market isn’t monolithic. By breaking down pay and hiring on a granular level, we found big differences between metros. For workers, comparing local labor markets can help guide career decisions. And employers can see where they stand in the sometimes-heated competition for talent.
The high dive
For those who want to dive deeper into the data
Explore the data for yourself.
One finding might seem counter-intuitive: Greater Washington, D.C., ranks high for natural resources and mining, an industry that few people would equate with the nation’s capital. But the region in fact is home to a handful of oil, liquified natural gas, and stone companies.
