Uneven Pay Growth Across Sectors in 2024
The labor market faced significant challenges in 2024, characterized by rising unemployment and sluggish wage growth. However, these changes did not affect all sectors equally, with some industries experiencing notable pay increases while others saw smaller gains.
Healthcare and Social Assistance Lead the Way
The healthcare and social assistance sector saw the most substantial pay gains, with wages rising by 7.9% in 2024. Brad Olsen, CEO of Infometrics, attributes this to recent pay agreements and the continued high demand for these services.
Education also fared well, with wages increasing by 5.7%, marking the third-largest rise. Similar to healthcare, this sector benefits from recent pay deals and a growing need for professionals.
Forestry and Mining Show Strong Gains
Forestry and mining industries experienced a significant increase of 6.2% in pay. Despite being a smaller sector, the impact of job losses due to lower commodity prices and weakened exports contributed to the larger percentage increase in pay.
Accommodation and Food Services Struggle
On the other hand, the accommodation and food services sector bucked the trend with just a 1.2% rise in wages. This stagnation can be attributed to weak demand and job losses within the hospitality and tourism industry.
However, it’s worth noting that compared to 2019, wages in accommodation and food services surged by a cumulative 39%, driven primarily by increases in the minimum wage.
Professional Services and Manufacturing Show Low Growth
Professional services and manufacturing also experienced low wage growth, with 1.7% and 2.1% increases respectively. Factors such as job cuts, reduced consultancy spends, and a high base of recent wage growth contributed to this minimal movement in pay.
The Broader Labor Market Outlook
According to Hayley Pickard, managing director of Fortitude Group, many sectors remained in hiring freezes, leading to little wage movement in the early part of 2024. This trend is unlikely to shift substantially through the first quarter.
Robert Walters, a recruitment firm, reported that 62% of businesses anticipate salary increases this year, while 57% of employees expect to see their pay rise. Despite this, some sectors, such as government, construction, property, and media, continued to experience stagnant pay due to job cuts and financial austerity measures.
A Shift in Job Market Trends
Oli Sanford-Scutt, senior director at Robert Walters Auckland, observes a significant shift towards relocation, with employees moving for higher salaries or a more affordable cost of living. This trend is expected to continue, driven by growing opportunities in high-growth areas.
Investment in technology, particularly in AI, data, and cybersecurity fields, is also driving demand for new skill sets across all sectors. This renewed focus on innovation is likely to impact wages and employment trends in the coming years.
Public Sector Challenges
Bridget Clarke, a senior director at Robert Walters in Wellington, points out that some public sector labor rates fell by as much as $20 per hour in 2024. Despite these declines, there has also been greater rate harmonization, leading to more consistent pay scales across the sector.
Hiring managers in the public sector are increasingly offering higher salaries to attract top talent, especially for fixed-term employment. This trend reflects the growing competition for skilled workers across all industries.
Conclusion
The labor market in 2024 saw significant variation in wage growth across different sectors. While some industries, like healthcare and social assistance, experienced substantial increases, others, such as accommodation and food services, faced minimal wage growth. These disparities highlight the need for ongoing support and investment in various sectors to ensure equitable growth and job satisfaction.
Going forward, as economic conditions and employment dynamics evolve, it’s crucial for businesses and policymakers to monitor these trends closely to adapt strategies and policies accordingly.
We invite you to share your thoughts and experiences with the job market in 2024 in the comments below. Your insights can help inform our ongoing coverage and analysis.