Wage Growth: White vs Blue Collar
0

The economic impact and uncertainty of the COVID-19 pandemic has caused companies to reconsider their wage plans. Available research indicates that while initially projected wage increases for 2020 have fallen due to the pandemic, companies still plan to increase wages. Available information indicates that blue collar and white collar wage increases are projected to be relatively similar in comparison with each other for the remainder of 2020 and in 2021. Minimum wage, as pertains to blue collar workers, is expected to increase both nationally and in many states over the next two years.

White Collar Projections

  • As a point of reference, according to Indeed, common white collar jobs include: accountant, market researcher, health services administrator, executive director, civil engineer, attorney, software engineer, and physician. Current national average salaries range from $53,806 to $196,424 per year.
  • A 2020 salary budget survey by WorldatWork indicates that employers expect white collar (exempt salaried) wages to increase an average of 2.9% in 2021.
  • The same WorldatWork survey projects an average increase of 2.67% in merit-based budget increases for white collar wages (professionals) in 2021.
  • The Willis Towers Watson’s 2020 General Industry Salary Budget Survey indicates companies are projecting average salary increases of 2.8% for white collar employees in 2021.

Blue Collar Projections

  • As a point of reference, according to Indeed, common blue collar jobs include: warehouse associate, inspector or packer, landscape laborer, refuse collector, flooring installer, mechanic, HVAC technician, and electrician. Current national average hourly wages range from $12.14 to $25.67 per hour.
  • A 2020 salary budget survey by WorldatWork indicates that employers expect blue collar (nonexempt hourly) wages to increase an average of 2.9% in 2021.
  • The same WorldatWork survey projects an average increase of 2.62% in merit-based budget increases for blue collar wages (support and nonexempt employees) in 2021.
  • The Willis Towers Watson’s 2020 General Industry Salary Budget Survey indicates companies are projecting average salary increases of 2.7% for blue collar employees in 2021.

Minimum Wage

  • Since blue collar workers are generally hourly wage workers, data for minimum wage projections is being included.
  • The current federal minimum wage is $7.25. Although there is currently no scheduled federal minimum wage increase, projections indicate an increase to $9 in 2021, and $11 in 2022.
  • 25 states and Washington D.C. have upcoming minimum wage increases. A complete list of minimum wages for all states is available here.

General Wage Projections and Related Data

  • Since limited specific data is available for this research, the following general information is presented to help achieve an overall understanding of projected wage changes over the next two years.
  • According to a study by Willis Towers Watson in April 2020, most businesses surveyed indicate that the negative financial impact and uncertainty caused by COVID-19 has negatively impacted short-term, long-term, and sales-based incentive plans, which may impact wages both in the short-term and long-term. The following chart indicates the percentage of businesses indicating a negative impact on these plans. COVID-19 Impact to Incentive Plans
  • As indicated in the same study, actions taken to adjust incentive plans include maintaining current plans and goals, but applying discretion at year-end, adjusting previously approved targets, and delaying goal setting, as seen in the chart below.Actions already taken, planned, or under consideration
  • 35% of U.S. companies surveyed indicate they plan to lower salary increases in 2021, while only 2% indicate higher wage increases than previously projected.
  • The same survey indicates that companies project an average of 2.6% wage increase for both salaried and hourly workers. Prior to the pandemic, employers were expecting pay increases to be above 3% in 2021.
  • A salary budget survey done by WorldatWork from May 27 to June 26 indicates that employers expect wages to increase by 2.9% on average through the end of 2020, compared to initial projections of 3.3%.
  • Referencing information from Salary.com, “The projected recovery to an average 2.6 percent merit increase next year indicates that employers are optimistic about an economic recovery in 2021 and hope to restore some lost pay as a result.”
  • According to a Willis Towers Watson survey, businesses continue to reward their top employees with higher pay raises; top performers received a 4.7% average increase instead of 2.8% increase for average performers.
  • According to a Salary.com study, “The average salary structure increase fell to the range of 1.3% — 1.6% in 2020 and [is] generally expected to stay the same in 2021. Median salary structure increases, however, are staying relatively stable at 2.0% for most employees.”

Job Industry Growth Overview

  • A 2020 report by the U.S. Bureau of Labor Statistics provides a list of the 10 fastest growing jobs, projected until 2029. According to the report, jobs in the healthcare industry are projected to rise significantly. This is consistent with projections about the rise in healthcare jobs from a report in 2016. Jobs in this industry are primarily white-collar.
  • An additional 2020 report by the U.S. Bureau of Labor Statistics lists and projects the 20 fastest growing jobs between 2019 and 2029, which includes both white-collar and blue-collar positions. The list includes 2019 median pay data.
GLENN TREVOR
Glenn is the Lead Operations Research Analyst at The Digital Momentum with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.

Impact of COVID-19 on Life Insurance

Previous article

Leading Companies that Provide Fitness Training and Expertise to Older Individuals (Aged 50-65 Years)

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.