Dallas-Fort Worth leads metros in pay gains
The Dallas region isn’t only a leader in job growth and migration. It’s also surpassing rival metros in pay gains — and by a big margin.
In the 12 months ended in October, average weekly earnings rose 8.3 percent in Dallas-Fort Worth, easily topping national and statewide numbers, and ranking No. 1 among the 10 most populous metros.
Go back to just before the pandemic, and local gains are more impressive. Since October 2019, average weekly earnings in D-FW have increased $171 to $1,179 a week, according to data from the U.S. Bureau of Labor Statistics.
That’s an increase of 17 percent, far higher than the state and nation, and more than double the two-year gains in Austin, Houston and San Antonio.
Many factors contributed to the surge in weekly earnings here, including the movement of high-paying jobs from California and other states. Some specialized technology positions are attracting bidding wars, and there’s evidence that low-paid workers are getting big raises, too.
“I can talk chapter and verse about this, but on a simple level, we’re paying a lot more for the same workers,” said Jim Baron, CEO and co-owner of Blue Mesa Grill and TNT/Tacos and Tequila.
His average hourly rate for kitchen employees is about $18 an hour, up from $15 in the past year or so, he said. The bigger challenge is finding workers for the front of the house, in part because so many wait staff employees decided to switch jobs during the pandemic or stay home with their kids.
Baron said starting assistant managers are getting $60,000 annually, up from about $40,000 five years ago: “We’re paying managers more money to compensate for not having enough people on the floor,” he said.
Individual pay raises don’t necessarily match the growth in average weekly earnings. A workforce with a higher concentration of tech workers could generate faster growth in average weekly earnings, in part because it has more high-paid employees.
Similarly, a big decline in the number of low-paid workers could contribute to a bigger gain in average weekly earnings. A surge in baby boomer retirements, which happened in the first year of the pandemic, also can lead to promotions — and higher pay — down the line.
“There are a lot of reasons we could see these kinds of differences” in average weekly gains, said Julie Percival, a Dallas regional economist at the Bureau of Labor Statistics. “One reason Dallas is doing so well is the huge influx of companies relocating from out of state. Most of the workers they’re bringing are hightech and high-paid.”
To gauge the improvement in individual pay, she prefers the Employment Cost Index, which samples private companies. By that index, wages and salaries in D-FW rose 4.3 percent in the year ended in September.
That’s almost two points higher than a year earlier. It’s also the first time since 2014 that the index has increased over 4 percent in DFW — and just the second time since at least 2006.
The bottom line is that wages are rising much faster than usual and appear poised to continue climbing. On Tuesday, the Conference Board said a new survey showed companies had increased 2022 salary budgets by 3.9 percent, the biggest jump since 2008.
Like Blue Mesa, many companies are facing labor shortages and higher wages — and more competition for their talent. Baron said he hired a general manager at a salary of $90,000, only to see him soon bolt for a rival that offered daytime hours and a Monday-to-Friday work schedule.
The steady growth in new companies into North Texas keeps driving up pay rates, said Matt Bomberger, senior vice president of global sales and operations at Bresatech, a professional services firm in Plano that does staffing.
“The companies moving in realize they’ll have to pay a premium for talent,” Bomberger said. “And the companies already here are afraid of losing their people, so they’re saying, ‘We’ve got to get ahead of this.’”
For his firm, that has led to more permanent job placements rather than temporary assignments, he said. Clients are also bumping up pay ranges to attract top people.
He recently proposed advertising $110,000 for a sales executive, but the client wanted to be more aggressive and offer $140,000.
Bomberger has some advice for employees who feel underpaid, even if they’re happy with their company: “Know what you’re worth,” he said, and let the boss know.
The gains in pay have been offset by high inflation, which has economists debating whether the inflationary pressure is temporary. But higher pay isn’t likely to be rolled back, said Jay Denton, chief labor market analyst at ThinkWhy, a Dallas-based software services company. His firm is working with companies that are raising pay for more than just star performers.
There’s always been strong competition for tech workers. What’s different now is that lower-paid workers are seeing some of the biggest increases. Median wage growth for the lowestpaid quartile of workers rose 5.1 percent compared with 3.6 percent for all workers, according to the Federal Reserve Bank of Atlanta.
Denton said there’s significant pressure to raise pay for workers earning $10 to $20 an hour: “We have a lot of catching up happening in the services sector,” he said. “People are starting to see meaningful wage growth.”
But there are risks if costs get out of whack in Dallas. “If it gets too expensive here, companies will start looking elsewhere — another metro in the United States or offshore,” Denton said.