NEW HANOVER COUNTY — A recent federal report singled out New Hanover County as suffering the worst decrease in average wages nationwide – but it’s likely this year’s numbers are actually the flipside of an error made last year, showing a spike in wages.
Last week, the Bureau of Labor Statistics (BLS) released its second quarter 2018 report and noted New Hanover County, “had the largest over-the-year percentage decrease in average weekly wages with a loss of 6.4 percent. Within New Hanover, professional and business services had the largest impact on the county’s change, with an average weekly wage decrease of $511 (-33.2 percent) over the year.”
So, did local professionals really lose a whopping $26,572 in wages over the year?
Probably not.
Last year’s ‘boom,’ this year’s ‘bust’
The “loss” is most likely the fallout from last year’s report, which showed an approximate 60-percent increase in business and professional wages – jobs like law and accounting firms – and a 12-percent increase across all industries wages. According to Adam Jones, a professor of economics at UNCW who is familiar with the local business scene, there’s little to indicate those numbers were representative of the real-world wages.
“I don’t see any activity large enough that could have driven this one-time spike in the numbers. In fact, the employment in the sector actually declined slightly from 2016 to 2017 which is not indicative of a growth in wages that is driven by demand and competition for talent,” Jones said.
Jones added that, to generate those numbers, over half of New Hanover County’s professional and business employees would have had to double their wages.
“Even if 2017 was a good year, I highly doubt it was that good of a year and if it was, it should show through to other sectors and those wages diffuse but we’re not seeing any of that,” Jones said.
Last year’s illusory boost in wages – although “real” on paper for BLS – made this year’s wage appear much lower by comparison, about $500 a week lower, on average.
“This news release is the second half of the data anomaly. Last year the anomaly made wages appear to have grown when compared to a year before and since this year’s figures are, assumedly, correct, the anomaly from last year makes us appear to have a large decrease in wages. The one-time blip suggests that this will be the last we’ll hear of the issue as next year’s figures compared to this year will ignore the blip of last year,” Jones said.
The ‘blip’
Still, where did the “blip” come from in the first place?
The majority of the spike appears between the first and second quarter of 2017, where BLS records show business and professional wages jumped 42 percent – a jump which doesn’t correlate with any new businesses opening or increases in other sectors.
According to Jones, it could simply have been a typo.
“I’m not sure where the error came from, it could easily be from a typo in reporting data or it could also be from a firm being improperly categorized. My guess is that it was a typo or issue in the data entry as a miscategorized company would also show up in the employment figures but they do not show the same anomaly,” Jones said.
Send comments and tips to Benjamin Schachtman at ben@localvoicemedia.com, @pcdben on Twitter, and (910) 538-2001.
