Maine wages up from 3rd to 4th quarter; longer trend shows stagnation

ACCORDING to wage data released by the CWRI yesterday, weekly wages for all industries rose $52 to $786 from the 3rd to 4th quarter of 2013, and were up $13 ($1.68 in inflation adjusted $) from a year ago.  Goods producing wages rose $64 to $980 from last quarter, and $43 ($19.13 inflation adjusted) from a year ago. Meanwhile service producing wages were up $50 to $751 over the quarter, and $10 from a year ago, but down $0.85 when adjusted for inflation.

In the private sector, wages for all industries rose $68 from the previous quarter, and $14 from a year ago (down $2.82 when adjusted for inflation).  Goods producing saw an enormous increase of $79 from the previous quarter, a rose $39 (up $25.41 when adjusted for inflation) from last year, while service producing wages rose $66 from last quarter, but were up just $9 (up just $1.81 when adjusted for inflation) in the last 12 months.

All but one county experienced increases from the 3rd to 4th quarter, led by Knox, which experienced $99 in wage growth to push its weekly average up to $715.  Piscataquis was the lone county to experience wage decline, down $6 to $590 a week.  However, while the 15 other counties experienced wage, Franklin, Sagadahoc, and Washington county all experienced fairly minimal growth ($5 or less).

While wages were up from the previous quarter, the longer-term trend of wages shows they have flattened,* with the very recent trend of the past few years showing a decline**:

(click image to enlarge)

Maine weekly wages (CWRI)

 

This decline is attributable to the decline in higher paying, goods producing jobs and the rise in lower paying, service producing jobs.  In 2001, 19.7% of all employed persons were employed in goods producing jobs.  By 2006, that number was down to 17.4%, and declined further to 15.2% in 2013.  Though not conclusive, this data indicates a slide to becoming a service economy will continue to flatten or drop wages for Maine workers.

*  Comparing not-seasonally adjusted data, as the wage data above is, can be misleading as it does not account for seasonal fluctuations.  To remove the seasonal fluctuations, year-over-year data, as provided above, provides a better picture of changes in the data.  Moreover, sudden increases or decreases might be the result of volatility in the date, and data is always subject to subsequent revisions.   However, month-over-month or quarter-over-quarter data are still necessary to help create those long-run trends.

**  As noted in the previous post, wages are subject to the fluctuations of the business cycle where wages increase during recessions, decrease during recoveries, and so forth.  (Again, see here).  However, given that the above data spans 13 years and two downward business cycle fluctuations (2001 and 2007 recessions), as well as the subsequent recoveries, coupled with the fact that current wages are in line with pre-recession levels, one can assume that current wages are falling back into line with those longer-term, pre-recession wage trends and are not necessarily the result of business cycle fluctuations.  

John Haskell

About John Haskell

John graduated from the University of Southern Maine with a degree in Political Science, and from the University of Maine School of Law. He has worked in both the public and private sectors, and currently, works with a small business services company in the Mid-Coast area.