Thread by @aaronsojourner

Hourly wage growth has accelerated *very* sharply to unprecedented levels for younger Americans, less acceleration for others.

Quick acceleration for young among *both* job switchers & stayers.

New analysis below builds off @AtlantaFed Wage Growth Tracker (WGT) analysis.

WGT computes wage growth for people employed both in a given end month & a year prior. This avoids many problems from changes in who's employed.

For 3 age groups, WGT reports monthly median wage growth averaged over most-recent 12 end months.

Only Zoomers (age 16-24) zooming.

If one looks only over the most-recent 3 months, instead of 12, the recent acceleration for Zoomers really pops. I did this a few weeks ago.

Today, I have 2 new things...

First, I break apart the large 25-54 year old group.

Are the 25-34 year olds more like Zoomers or like older workers?

Here's the 12-month look. Wage growth always tends to be faster for younger than older workers.

Acceleration is just among Zoomers.

Here's the 3-month look, noisier but allowing most-recent acceleration to come be understood separately from prior.

Recently, 25-34 year olds are starting to get some acceleration. Fastest growth since pre-Great Recession. Not older tho.

Young having unprecedented wage growth.

The 2nd piece of new analysis is to look at differences between job stayers & job switchers by age group.

There's a common finding that wage growth is faster for job switchers than stayers. True in the WGT (figure).

Is Zoomer growth just that young people switch jobs more? No.

I created 4 age groups and divided each between switchers and stayers. Widened age bins to get sample.

Here's the 12-month figure for age 16-29 year olds. Switchers almost always get faster wage growth than stayers but they've seen similar acceleration into the last year.

Narrowing on the most-recent 3 months, see a similar pattern.

Among 16-29 year olds, both stayers & switchers seeing very rapid acceleration in wage growth recently.

Stayers at record level wage growth, around 9%.

Switchers match pre-2001 recession record, 12%.

For the next older group, 30-44 year olds, switchers are seeing faster acceleration, around 6%.

Stayers less.

For 45-59 year olds, wage growth around 3-4% for both switchers and stayers, highest since Great Recession but not back to those pre-GR rates.

For age 60+, around 2% growth for switchers and stayers.

A month ago, I speculated about why wage growth fastest among youngest.

Both young switchers & stayers getting acceleration seems consistent with this theory, raises for youngest workers as least expensive way to staff & satisfy internal equity norms.

Even given rising consumer prices, younger workers' wages are rising faster and they may feel their economic situation improving dramatically.

For older Americans, price rises are more likely to be outpacing wage growth.

Is acceleration in young workers' wages just bcz they're more likely to work in Leisure & Hospitality?

Predicting median wage growth in the individual level data for the most-recent 3 months yields the following estimates.

Age dominates, controlling for lots else.

Workers older than age 24 are getting 9-12% lower median wage growth rates than 16-24.

Leisure & Hospitality (indgroup) is associated with 1.2% faster median wage growth than the omitted industry (Construction & Mining).

Controls for age, salary, job switching, gender, educ, part/full time, occ skill group, industry, coarse race, MSA status, region, and wage quartile.

Caution & more work is warranted here. Data may be thin, not using weights.... But suggestive.

Comparing the July-Sept 2021 coefficients to those from July-Sept 2019 shows that the age associations have really changed, while others have changed less.

Sorry for the terrible labelling. It's a pain to clean up.

Finding big pattern breaks always makes me nervous. Real or data/coding error? Love to see others dig in.

But these are medians, so should be robust to outliers. Also acceleration for young workers among both switchers & stayers. Not just one.

Other ideas to probe?

Median wage growth is similar across industries among young workers over the last 3 months.

Fastest in Leisure and Hospitality but very similar in Construction & Mining (omitted = 0), Public Admin, Finance & Business Serv.

Here's the code, which build off the Atlanta Fed data and code.
github.com/aaronsojourner…