Inflation has outpaced wage growth in several major white-collar industries, reducing real earnings since 2021. An analysis used employment cost index and consumer price index data from the Bureau of Labor Statistics indexed to 2021 to compare wage and salary growth against inflation. Financial activities and professional and business services experienced wage growth that lagged inflation, weakening worker bargaining power and contributing to a stagnating white-collar job market. New entrants face more competition and fewer opportunities, and experienced workers find it harder to secure advanced roles or promotions. In contrast, healthcare, social assistance, and other in-person service sectors posted wage gains that exceeded inflation and stronger job growth.
There's more troubling news for the white-collar job market: wage growth is falling short of inflation. A Bankrate analysis used employment cost index and consumer price index data from the Bureau of Labor Statistics to look at how the gap between wage and salary growth and inflation has changed since 2021. The difference allowed Bankrate to identify the industries with better worker bargaining power. Financial activities and professional and business services fell on the wrong side of that divide. Wage growth falling behind inflation in those sectors adds to the bleak picture of the white-collar labor market.
On the other side of the coin, some sectors dominated by in-person service work that were in high demand after the pandemic recession have had more robust wage gains. Foster said it's no coincidence that wage growth outpaced inflation in the healthcare and social assistance industry and other areas where job seekers have been sought after. From May to July, job growth averaged about 68,000 in healthcare and social assistance, about double the average gain for nonfarm payrolls.
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