More Jobs? Yes. More Pay? Maybe.

Supporters of raising the minimum wage rallied in Illinois in fall 2014. Thirteen states increased their minimum wage in 2014.
Supporters of raising the minimum wage rallied in Illinois in fall 2014. Thirteen states increased their minimum wage in 2014. –AP

Boston’s economy added 25,000 jobs in 2014, making it the best year for job growth since 2007. The unemployment rate has fallen to 5.2 percent, according to Mayor Marty Walsh’s office. National employment numbers trended the same way, with job growth averaging 246,000 new jobs per month and unemployment falling to 5.6 percent, according to the US Bureau of Labor Statistics.

But there has been some concern that despite the improving job market, wages have not bounced back. The average hourly wage for non-management workers has risen 1.7 percent in 2014, according to the Boston Globe. This is just slightly above inflation.

Why the stagnation? Federal Reserve chair Janet Yellen has said that recessions can take years to recover from, wage-wise. Also, more and more young people are getting jobs as the baby boomer generation retires. Since less-qualified employees are typically paid less, this can bring down the average wage.


There is hope for improvement, however. In Massachusetts, we can already expect a minimum wage increase from $8.00 to $9.00 per hour this month.

And if employers add jobs, the search for workers to fill them heats up. In order to attract the best candidates, companies might have to raise wages, increase benefits, or improve working conditions – or all three — consistent with others that are hiring.

Additionally, the National Federation of Independent Businesses released its December report this week, and said small business optimism is at its highest level since October 2006. This is a sign that they expect higher sales and are finally shaking off some of the chilling effects of the recession, which could translate to better wages for employees.

Some industries are already breaking out of the sluggish wage growth trends.

Robert Clifford, senior policy analyst at the New England Public Policy Center, said data has yet to be analyzed for 2014 to 2015, yet, but when comparing the average weekly wage from the second quarter of 2013 to the same period of 2014, the transportation sector of Massachusetts saw the highest increase in both employment and wages. Transportation saw a 4.6 percent increase in wages, compared to the state’s average increase of 2.3 percent.


Since it’s just a quarter-to-quarter comparison, however, Clifford described the data as a “snapshot.’’

“There’s a lot of volatility,’’ Clifford said. “This doesn’t show long-term trends.’’

Though things look positive for now – especially in transportation — University of Massachusetts Economics Professor Randy Albelda said wages are impacted by many more variables than the market.

“If markets worked the way everyone tells us they do, wages should be going up,’’ Albelda said. “But they aren’t. There are more political elements to it.’’

Albelda said two job sectors we should be watching for political impact this year are education and healthcare. Governor Charlie Baker, a Republican, has decided Massachusetts has a spending problem, and there could be budget cuts to these sectors, preventing wage growth.

Baker takes office facing a deficit, and must file a budget proposal for fiscal year 2016 by March. He estimates the imbalance exceeds $500 million.

This week, Baker met with the state’s top legislative leaders to discuss the budget. Baker has already announced a hiring freeze that could affect between 200 and 450 open positions. It won’t affect law enforcement or direct care workers like nurses though, according to MassLive.

Albelda also pointed to nationwide fast food worker strikes this year and said that labor activism can greatly affect the political decisions that impact wages. This year, 11 state legislatures approved minimum wage increases through ballot measures.

“When put to the voters, they think that if you work hard, you should be able to feed yourself,’’ she said. “So, it also depends how much people work for it.’’

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