5 Cities Where Successful Wage Growth Is Happening

For several years after the 2008 market crash, the economic recovery was seen only in corporate earnings statements and consistent job reports. Family paychecks, meanwhile, didn’t keep pace. Average hourly wages rose at an anemic 2 percent from 2010 to 2014 — and that’s not accounting for inflation. Worse, US workers’ pay had lagged behind other indicators for nearly a decade, the result of bloated executive salaries, global outsourcing of jobs and capital investments in mechanization.

But in the last two years, that dynamic has begun to shift. Unemployment bottomed out at 4.6 percent last year (down from a high of 10 percent in 2009), meaning businesses needed to pay more to recruit and retain employees. Last October, wage growth hit a high of 2.8 percent nationwide.

In which cities has the average worker seen the biggest comparative bump in pay, as measured by higher wages and more work hours? (Hint, three are in blue states, two in red, and not one can claim more than a million residents.) Donald Trump’s 2016 victory in the Electoral College revealed the regional inequities, between the coast and the heartland, that divide our country. As a way to bridge those separations, NationSwell dug into the data to find out what drove better pay in these metro areas, offering five methods for the next administration to consider.

Hot-air balloons soar above Balloon Fiesta Park during the Albuquerque International Balloon Fiesta.

5. Albuquerque, N.M.

Population:559,121
Wage growth in 2016:5.70%
Average weekly pay:$745, up from $703

Statewide, New Mexico’s economy has struggled to make a comeback. At the end of 2015, the Land of Enchantment logged 17,300 fewer non-farm jobs than in pre-recession 2007. But after taking a years-long beating (including more than a doubling in meth overdoses), the state’s biggest city, Albuquerque, is starting to show signs of progress.
Historically, the city has relied on federal spending for a slew of jobs at Sandia National Laboratories, which focuses primarily on weapons, and Kirtland Air Force Base. If President Trump pumps money into defense, the city will likely be a prime beneficiary. But reliance on public dollars “is not a growth industry,” noted Jim Peach, a New Mexico State University economics professor, last year.
To capitalize on government investment, the city is trying to establish the high desert as a hub for science and technology companies. They’re sharing technical discoveries from the national labs (and the state university’s flagship campus) with local small businesses. And they’re also hoping to attract more semiconductor manufacturers near Intel’s chip-making facilities in Rio Rancho, a half-hour drive from downtown. The high-paying jobs in those sectors could power Albuquerque back into full recovery.

The new U.S. Bank Stadium in Minneapolis will host the Super Bowl next year.

4. Minneapolis–St. Paul, Minn.

Population:711,790
Wage growth in 2016:5.97%
Average weekly pay:$998, up from $938
In February 2018, Minneapolis will play host to America’s most watched televised event: the Super Bowl, to be held at U.S. Bank Stadium. (St. Paul will host an accompanying winter carnival, featuring a gigantic ice palace, to draw spectators across the river.) The NFL’s imprimatur is just the latest sign that businesses are increasingly eyeing the Twin Cities for development opportunities. “The number one thing is that people who make decisions for business now have a much more positive view of Minneapolis, and look at us for business expansion,” said Mayor Betsy Hodges, according to the Minneapolis Star Tribune.
To prep for the crowds who’ll be streaming into town to watch football, the city is also shoring up a shopping district in the city center, which has been battered by competition from suburban malls and online retailers. At the moment, a Macy’s department store is the last remaining anchor, but a $50 million revival plan for Nicollet Mall promises to make it a “must-see destination in downtown,” said David Frank, the city’s planning and economic development director.
All that new business means more workers are making more money, thanks to a red-hot 3 percent unemployment rate and a recent change in state law. Last August, a raise in Minnesota’s minimum wage went into effect. At $9.50 an hour for large employers, the hike lands the state near the top of guaranteed minimums. And as debate over a citywide standard of $15 per hour becomes the defining issue of this year’s mayoral campaign — Mayor Hodges recently flip-flopped her position to support the wage bump — compensation seems likely to continue trending upward.

A view of downtown Charlotte, N.C.

3. Charlotte, N.C.

Population:827,097
Wage growth in 2016:7.94%
Average weekly pay:$983, up from $905
If the number of new housing units rising across this Southern city is any indicator, people desperately want to move to Charlotte. At the beginning of last year, construction had begun on more than 12,300 units, and another 13,500 more were planned. The buyers? Foreign-born immigrants who’ve made a home in the New South, young millennials (including Villanova grads) who’ve found plenty of jobs to be had in Charlotte’s banking and advanced manufacturing sectors, and former exurbanites moving back to the city core.
“During the Great Recession, the sprawling developments in the exurbs ground to a halt,” Brian Leary, president of a local development firm, told Curbed. So those people moved closer to the central business district and the expanding light-rail system. “People are craving connectivity to each other and experiences, and those places that can deliver the most experiences in an accessible way can command premiums and value over time.”
Charlotte won that appeal despite the controversy over H.B. 2, the so-called “bathroom bill” that forces trans people to use facilities that match the gender on their birth certificate. The state law, which was drafted in response to a local anti-discrimination ordinance in Charlotte, led to boycotts and unknown quantities of lost revenue. A new governor could overturn the controversial legislation, which in turn could accelerate new business.

2. Nashville–Davidson, Tenn.

Population:654,610
Wage growth in 2016:10.07%
Average weekly pay:$904, up from $812

Another Southern city growing at breakneck speed, Nashville has capitalized on its reputation as a destination for creatives to attract newcomers. Seeking out the city’s robust music scene, tourists continue to stream into Nashville. For 70 months in a row, the hordes of visitors broke records for nightly hotel stays; by the end of the rush last October, Nashville set an all-time record, beating out Houston’s 59-month streak. “We have music, a cool brand, Music City Center and Opryland,” plus two convention centers, Butch Sypridon, CEO of Nashville Convention and Visitors Corp., boasted to The Tennessean.

Now that the city is expanding, officials are moving to the next checklist item they must fulfill to stay on an upward trajectory: luring high-wage employers — an important task, given that Tennessee has no statewide minimum wage. To do so, Nashville is trying to keep as many Vanderbilt alumni in town as possible, while also welcoming foreign immigrants.

The population is there to make Nashville a major economic powerhouse, if the city can attract the right firms. ”If we didn’t have 1,500 people moving to town every month, we won’t have the job growth that we’re having,” said Ralph Schulz, the Nashville Area Chamber of Commerce’s CEO. “Before you had to have the jobs and the population came. That’s not the case anymore. Now it’s workforce, then jobs [follow].” If job openings outpace new residents, expect wages to rocket even higher.

West Loockerman Street in Dover, Del.

1. Dover, Del.

Population:37,522
Wage Growth in 2016:14.05%
Average Weekly Pay:$764, up from $656
Perhaps the most unexpected entrant on the list, the tiny town of Dover, Delaware’s state capital and second largest city, recorded the largest percentage jump in wages in the nation. The payoff is the result of a 10-year comprehensive plan Kent County officials laid out in 2007, which emphasized attracting new companies without losing the area’s farmland and rural charm.
One of the biggest boons to Dover’s economy has been the aviation industry, anchored at Dover Air Force Base. Taking advantage of the military’s need for supplies, the state is building an Air Cargo Ramp that can accommodate large civilian carriers, about the same size as four Boeing 747 planes. The city has also been aided by expansions at several factories, including bra-producer Playtex and food giant Kraft, and a surge in entrepreneurship; in 2015, the dollars loaned to small businesses statewide shot up 156 percent.
On top of that, Dover punches above its weight in attracting some 2 million tourists annually, generating half a billion in revenue countywide. Visitors are drawn by state parks, casinos, NASCAR races and music festivals, like the 80,000-attendee Firefly. “I met a fairly new resident of Kent County a few weeks ago who lives in one of our newer housing developments,” Cindy Small, Kent County’s tourism director, told the local paper. “She mentioned that out of 30 or so homes, 28 of them have been purchased by non-Delawareans. You can bet they were visitors first. They came, they experienced; they relocated.”
It should be noted that Dover’s wages at the beginning of 2016 were, by far, lowest among the top five performers, making it all the easier to notch big gains among its small population. But the town did so even after Delaware upped the state’s minimum wage to $8.25 an hour in June 2015. Even after the change, this booming town’s average pay has continued to rise, perhaps fueled by a still relatively cheap cost of living and an influx of consumer spending.

An Ambitious 20-Year Study Aims to Explain Human Behaviors and More Must-Reads

 

This Audacious Study Will Track 10,000 New Yorkers’ Every Move for 20 Years, Vox
Doctors, sociologists and psychologists utilize longitudinal studies to analyze how we change over time, but their research presents a segmented view of human behavior. A groundbreaking project at New York University, recording everything that happens in 4,000 households over 20 years, will take a more interdisciplinary approach to its data. By the study’s end, we might see, for example, how sleep affects relationships or how genetics dictates what we buy.

The Janitor Felt Invisible to Georgetown Students — Until One Changed His Life, Washington Post
As students rush to class, it can be easy to forget who maintains a college’s pristine façade: the gardeners who tend the quad or the chefs who prepare the dining-hall fare. At Georgetown, one student’s friendship with a janitor led him to create a Facebook page featuring profiles of university staff, from window-washers to repairmen. The stories they shared were so popular, students raised thousands of dollars to help out a few of them, including funding a janitor’s dream to open his own jerk-chicken restaurant and buying a cashier a round-trip ticket to his native South Sudan to visit the family he hasn’t seen in 45 years.

How Did Walmart Get Cleaner Stores and Higher Sales? The New York Times
For years, Walmart executives looking to bolster the bottom line hacked away at labor costs. The results showed: dirty bathrooms, near-empty shelves and nonexistent customer service depressed sales. How did the retail giant make a turnaround? Last year, they upped wages and invested in training. Sales reversed course and climbed upward, showing that employees are only a monetary drain when they are treated that way.

Inside Michigan’s Minimum Wage Wars

Days after the formal plans for a nationwide strike in the fast food industry, Michigan Governor Rick Snyder tried to get ahead of the game by signing a wage increase, bumping his state’s minimum wage to $9.25 an hour over the next four years.
According to the Washington Post, Governor Snyder, commended his “partners in the legislature for finding common ground on a bill that will help Michigan workers and protect our state’s growing economy.”
Snyder signed the legislation just under the wire. Why? Labor groups had racked up more than 300,000 signatures supporting the addition of a minimum wage hike to this November’s ballot.
However, their efforts may be without a conclusion as the initiative may not be eligible for the ballot. Although the initiative only needed 258,087 signatures (or eight percent of the overall votes cast) since the Governor signed a bill repealing the current minimum wage law, the original law that the labor groups opposed will no longer be in place.
This effort is just another step in increasing minimum wage across the U.S. According to the Department of Labor, two states — Georgia and Wyoming — are tied for the lowest minimum wage (out of a total of 45 possible states with minimum wage laws) coming in with a total of $5.15 per hour. However, the federal minimum wage is $7.25; it supersedes state laws, according to the Department of Labor. Five states currently are without minimum wage laws: Tennessee, South Carolina, Mississippi, Louisiana, and Alabama.
MORE: A Northwestern State Proves That a Higher Minimum Wage Doesn’t Necessarily Increase Unemployment
According to CBS Detroit Local News, Michigan’s current minimum wage is $7.40 — making it almost $2 an hour more than the lowest, but still far behind the state of Washington, which has the highest minimum wage at $9.32 an hour. Governor Snyder’s bill almost levels the playing field between Washington and Michigan.
Nationally, President Obama pushing for a raise of at least $10 an hour. According to the New York Times, a White House official shared, “the President has long supported raising the minimum wage so hard-working Americans can have a decent wage for a day’s work to support their families and make ends meet.” His Fair Minimum Wage Act or the Harkin-Miller Bill ups the minimum wage to $10.10, which in order to lessen the burden on employers, proposes raising the minimum wage in a series of steps over a few years.
With minimum wage being a hot topic during the mid-term election campaigns, guaranteed this discussion is far from over — even in Michigan.
 

The Cost of Walmart Paying Its Employees a Living Wage

Take a guess how much the price of a 68-cent box of mac-and-cheese would increase if Walmart paid its employees a living wage. Twenty-five cents? A dollar?
Try a single penny.
In this fascinating video from Slate and Marketplace, you can see that if Walmart passed the cost of increasing their workers’ salaries along to consumers, prices would only increase by 1.4 percent.
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It’s no secret that Walmart pays wages so low to their employees that many rely on (yep, taxpayer-funded) food stamps. Many of these workers return to their place of employment, spending their food stamps on Walmart’s low-priced goods — funneling even more money to the big-box retailer in a vicious cycle. As the videos points out, the United States distributed $76 billion in food stamps last year, and Walmart took in 18 percent of food stamp dollars, or about $13 billion.
Of course, why make the consumer pay extra for Walmart to increase its payroll costs when the retail giant could easily absorb this expense? Slate and Marketplace crunched the numbers and found that by simply raising the average cashier’s wage from $8.81 to $13.63 (a point where they would be ineligible for food stamps), would only cost Walmart $4.6 billion — an amount that the company could simply absorb from the $17 billion they made last year.
Kind of puts the Walmart slogan “Save Money, Live Better” into perspective, doesn’t it?
 

A Northwestern State Proves That a Higher Minimum Wage Doesn’t Necessarily Increase Unemployment

Talk about forward thinking. For 16 years now, the state of Washington has boasted the highest minimum wage in the U.S. — currently $9.32 per hour, a full two dollars and change more than the federal mandate of $7.25.
When west coast voters passed the initiative in back in 1998, opponents claimed that a higher wage would kill jobs. Coincidentally, this is the same argument that is being used by politicians, business groups and lobbyists who are fighting against President Barack Obama’s push for a $10.10 minimum wage. As the debate continues, Bloomberg analyzed the numbers in Washington state, and the results are surprising.
MORE: These Billionaire GOP Donors Support the Idea of a $12 Minimum Wage. Will the Party Follow?
After Washington’s minimum wage increase passed, which increased wages over two years to $6.70 and linked future increases to inflation as measured by the Consumer Price Index, unemployment in the state spiked for a three-year period. However, in the years that followed, unemployment gradually decreased. For four of the past five years, Washington’s unemployment rate has been below the national average — as well as below the averages for the Western and Southern regions. Overall, Bloomberg reports that Washington’s job growth has continued at an average of 0.8 percent annually, outpacing the national growth rate of 0.3 percent.
An added bonus? Poverty in the state trailed the U.S. average for at least seven years as well. And payrolls at Washington’s restaurants and bars — employees of which are particularly vulnerable to minimum wage laws — have expanded by a whopping 21 percent. In other words, after 15 years of implementation, Washington’s minimum wage increase is successful. “It’s hard to see that the state of Washington has paid a heavy penalty for having a higher minimum wage than the rest of the country,” Gary Burtless, an economist at Brookings Institution and former U.S. Labor Department worker, told Bloomberg.
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How do the results seen in Washington line up with those projected nationally? A report by the Congressional Budget Office published in February found that President Obama’s proposal of raising the minimum wage to $10.10 would reduce employment by 500,000 workers — a talking point that has been levied by opponents of the wage increase. However, the same report found that a higher minimum wage would lift 900,000 people out of poverty.
So while it’s true that raising the minimum wage would create higher costs for employers — which could lead to job cuts — the increase in pay will likely be pumped back into the economy by citizens who are spending more money than they would be able to if they were being paid at a lower rate.
That might not be enough to convince Congress, but just take a look at this sobering map created by the National Low Income Housing Coalition, which shows the hours per week that minimum-wage employees would need to work in order to afford a two-bedroom apartment. In Washington, these employees would need to clock 81 hours a week — and that’s despite the fact that they are paid the the highest minimum wage in the country. For the 19 states that adhere to the federally-mandated $7.25 an hour … well, let’s just say it doesn’t look like these employees will be affording the apartment of their dreams (or even any apartment) anytime soon.
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