Latest News

Local wages rebounding, but jobs are still declining

The latest data on pay and jobs show local workers' wages have begun to claw higher as employment continues to slip. Meanwhile, both measures remain below their levels before the downturn began.

Workers in Mecklenburg County made $6.8 billion in the second quarter of 2010, an increase of $271 million, or 4 percent, from the same period in 2009.

About 534,000 people were employed countywide in the second quarter, down less than 1percent from the same three-month period in 2009.

The report this week is the latest indication that the Charlotte region's economic climate remains muddled by mixed results and uncertainty about how long it will take for the area to again reach its pre-recession peak.

"Eventually it will get back - that's the good news," said Rick Kaglic, an economist with the Federal Reserve in Charlotte. "The less good news is that it's going to take a while. This was an atypical shock to the economy, and it oftentimes takes a little longer to recover from that."

The average weekly wage in Mecklenburg County climbed to $984, or about $51,170 per year, in the second quarter of 2010. That's nearly 5 percent higher than the same period the year before, better than the 3 percent bump nationally.

That's partly because as the economy began to recover, employers began to increase workers' hours and restore pay they cut during the recession, Kaglic said.

But the $6.8 billion in total wages in the second quarter last year was still off from the $7 billion in the same period in 2008, just after the recession began.

One reason is that employment is still falling, meaning there are fewer people getting paid. The number of workers employed in Mecklenburg was down 6 percent - or more than 37,000 - from the second quarter of 2008.

Many of the employers that ramped up workers' hours were able to avoid hiring more employees as a result. And many job seekers accepted part-time jobs, making far less than they earned before, just to get by.

What's more: While it's promising that the average weekly wage is again climbing, that doesn't mean every worker in Mecklenburg County is making more money.

Rather, it could be a sign that the breakdown of jobs is changing - that more lower-paid workers are losing their jobs, leaving a higher percentage of highly paid jobs, Kaglic said.

Even if those higher-paid workers' salaries remain the same, the shift in the employment base could drive up average wages, he said.

Finance, insurance wages up

Some sectors performed better than others in the year after the recession ended, the data show.

Finance and insurance wages, which make up 15 percent of the county's overall paychecks, climbed more than 8 percent in the second quarter of 2010 from the same period the year before.

That's welcome news in a sector hit hard by the banking crisis. From 2008 to 2009, for instance, Mecklenburg County lost nearly $1 billion in financial sector pay after the turmoil at Wachovia, Bank of America and throughout the industry.

In the first quarter of 2010, those wages began to climb over the previous year, a sign that bank bonuses rebounded after two years of declines.

Jobs in the industry continued to increase in the second quarter of 2010 from previous quarters. But jobs were down from the year before, indicating that the second-quarter wage increase was due to higher pay, rather than headcount.

Other sectors posted dismal results. In the construction field, for instance, total wages fell more than 10 percent in the second quarter from the year before, while jobs slipped 11percent.

Kaglic said data from the rest of 2010 might reflect the "soft patch" in the economy that started last summer and continued until November.

Recent weeks have brought some positive news. French consulting firm Capgemini on Thursday announced plans to bring 550 new jobs to the region, for instance. And a recent survey of employers found that nearly half of the N.C. respondents planned to hire in 2011. More than 60 percent of those companies planned to increase workers' pay, according to the poll from The Employers Association in Charlotte and other employers groups.

There's still a long way to go, though, with Mecklenburg's unemployment rate at 10.4 percent in November. Kaglic said it could take until 2015 or 2016 for the jobless rate to drop back to pre-recession levels - and that slack in the labor force could translate to lower wages, too.

He expects steady but moderate increases in employment and wages in the first half of this year, followed by more robust gains in the second half.

But, he added, "it's hard to say that anything has gone as expected over the course of this recession and subsequent recovery."

  Comments