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Wage Winners in 2017: Ecommerce and Retail?

By / 2.16.2018

Overall, 2017 was still a weak year for wage growth. In the private sector, real hourly wages for production and nonsupervisory workers rose only 0.2% in 2017, the slowest rate since 2012.

However, production and nonsupervisory workers did do significantly better in some industries. The table below lists the top 2017 increases in real hourly wages for large industries, defined as 3-digit industries with more than 500K production and nonsupervisory workers.

The top large industry for real wage growth in 2017 was warehousing, where a 4.9% gain in real hourly wages  for production and nonsupervisory workers was likely driven by the growth in ecommerce fulfillment center employment.

Other big winners were some retail industries and restaurants. These gains in part reflect increases in minimum wages for 21 states in 2017. But the other driving force is the need for brick-and-mortar retailers to upskill their workers to better compete with ecommerce.

2017 Wage Leaders for Large Industries*
Real hourly wage gain for production and nonsupervisory workers, 2017
Warehousing and storage 4.9%
Chemical/pharma manufacturing 4.7%
Sporting goods, hobby, music, and book 2.8%
Food services and drinking places 2.5%
General merchandise stores 2.5%
Heavy and civil engineering construction 2.2%
Repair and maintenance 2.2%
Clothing and clothing accessory stores 2.1%
Personal and laundry services 2.0%
Building material and garden supply stores 2.0%
Health and personal care stores 1.6%
*3-digit industries with more than 500K production and nonsupervisory workers
Data: BLS

 

If we just focus on warehousing for a moment, we see that real hourly wages in the industry started to rise after 2013, just as employment started to soar from the big expansion of ecommerce fulfillment centers. The left hand axis (red line) is real hourly wages for production and nonsupervisory workers, in 2017$, and the right hand axis (blue line) is employment of production and nonsupervisory workers.