Perhaps it’s time to ask for a raise.
Believe it — higher paychecks are finally happening in South Florida — larger increases than even in Seattle, San Francisco and New York.
South Florida’s wages and salaries are up 3.9 percent, the highest of any metropolitan region, according to the latest annual compensation data from the U.S. Bureau of Labor Statistics. The tri-county region of Broward, Palm Beach and Miami-Dade counties also is outpacing national wage growth, which had a moderate 2.4 percent increase over the year.
The regional wage hike is a full percentage point higher than in June 2016, when there was a 2.9 percent increase.
Why are wages finally going up?
Unemployment in the region has steadily declined with the improving economy, and now there are record numbers of job openings. With the tight labor market, employers are having to pay more to hire and retain employees with the skills they need, economists and recruiters say.
“If employers are seeing two, three four employees walk out the door and go across the street, they’re saying, ‘enough of that. We’re going to do something different,” said Kellen Smith, managing partner for MSI Consulting, a South Florida recruiting firm.
“There’s a real fight over the talent because there’s not enough of it,” Smith said.
Tony Ash, vice president of business relations for workforce agency CareerSource Broward, said employers “have become more competitive because it is a job seekers’ market.” As the South Florida economy continues to improve, “employers are going to have to get creative in hanging on to their talent,” he said.
Mekael Teshome, Florida economist for PNC Bank, said with unemployment falling substantially and the workforce growing, “it has become harder for employers to hire without offering some kind of pay increase.”
By May, unemployment across the nation was at its lowest level in a decade and in June, there were record-high job openings, 6.2 million of them, according to the federal government.
Despite the more robust economy, rising wages have continued to lag — so workers have not seen more in their wallets or checking accounts.
Gad Levanon, chief economist for North America, for The Conference Board, a global research organization, said wage growth typically lags behind a tighter labor market. On the national front, “I think as the labor market gets tighter — we expect economic growth to be pretty solid going forward — that is likely to push up wages,” he said.
South Florida appears to be leading the way, with lower unemployment, more job openings, and now — higher wages.
In Broward County, unemployment fell to 4 percent in June, and Palm Beach County to 4.3 percent. Miami-Dade County dropped to 4.9 percent. Meanwhile, the tri-county region has been adding lots of jobs: a total of 80,800, an average increase of 3 percent over the year.
Recruiters say the tighter market is translating into higher wages and other compensation.
“Now, to hire good people, you’re going to have to compensate them differently,” said Randy McDermott, metro market manager for Robert Half International in South Florida.
Robert Half has been seeing wage increases “across the board” in staffing, including administrative jobs, accounting and finance, technology and marketing. McDermott said he’s also seeing sign-on bonuses and time-life balance perks, such as Fridays off during the summer.
“Where an administrative professional got paid $12 an hour three years ago, now it’s $14 an hour. We’re seeing those kinds of lifts,” he said.
Smith of recruiting firm MSI Consulting said he’s seeing more than the typical industries — such as technology and healthcare — having to compete for talent by increasing compensation. “Manufacturing clients that are having to do that. Construction is very competitive,” he said.
Palm Beach County has been seeing high demand for jobs in hospitality, healthcare, aviation and aerospace, and business and professional jobs, according to Peter Pignataro, manager of performance analysis for CareerSource Palm Beach County.
The 3.9 percent wage hike is an aggregate over the year, he pointed out. “Not everyone got it, and some got much more,” Pignataro said.
So South Florida is not all sunshine when it comes to the job market.
Economist Teshome said that despite higher wages, the region is still creating too many low-wage jobs: 30 percent were in leisure and hospitality during the April to June quarter, he said, which tend to be lower-paying than technology or other higher-skill jobs.
And even a 4 percent pay raise fails to offset the cost of housing in South Florida, which has few affordable options. “The cost of living and housing costs are still rising faster than wages,” Teshome said.
Wages and salaries data is part of the Employment Cost Index, a quarterly report by the Bureau of Labor Statistics. The next report is due out in October.
Is it now time to ask for a raise or look for a job?
Smith said if someone isn’t happy with a job or wants to explore new opportunities in the job market, “it’s a good time to be doing it.”
McDermott suggested that workers have a “conversation” about compensation with their employer, instead of job-hunting in the hopes of attracting a counter-offer. While companies are making counter-offers in this tighter market, it creates “ill will” with employers, he said.
“Every time you go to the dentist, your employer wonders if you’re interviewing. It’s better to have that discussion upfront,” he said.