US workers’ wages rose 4.3% year over year in the fourth quarter, up from a 3.2% average in the third quarter, according to the ADP Research Institute’s Workforce Vitality report, released Jan. 26. In December, wage growth for both job holders and job switchers hit all-time highs of 5.9% and 8.0% respectively.

The average wage rose $1.33 year over year to $31.53 per hour.

“ADP data showed US wage growth increased 4.4% on average for all workers in December 2021, with job switchers and younger job holders [seeing] the largest wage growth,” said Nela Richardson, chief economist, ADP. “Leisure and hospitality, which experienced the greatest job loss due to the pandemic, was a notable exception to this overall trend. While leisure and hospitality led employment gains in the first half of 2021, it is the only industry where job switchers’ wages were basically flat on average in December 2021 compared to the previous year.”

Individual-level wage growth measures provide a more precise view of how the pandemic and tight labor market are impacting wages, according to the report. Job holder wages in December 2021 surged by 5.9% from December 2020, an all-time high level of growth.

But wage growth among job switchers has been the biggest beneficiary of current labor market conditions as firms are struggling to find available workers. Job switchers’ wage growth averaged 7.5% in the fourth quarter, up from 4.7% at the beginning of 2021.

The impact of the pandemic has varied across many dimensions, including gender. Overall wage growth for men and women each bottomed out just above 1% in May. However, since that time, female wage growth has surged to 5.7% while the increase for men has been much more tepid at only 3.4% in December.

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