Hampton Roads Economic Monthly

Wage Growth-Are All Industries Equal?

by Greg Grootendorst, Chief Economist and Katherine Rainone, Regional Economist

August 2022

The past two years have shown historical growth in wages, after over a decade of relatively slow wage growth in
both Hampton Roads and the Commonwealth of Virginia. These historic increases in wages are due to a combination
of factors – stiff competition for workers, both to retain and hire, and rapidly rising costs due to inflation. A closer look
at data reported by the Bureau of Labor Statistics (BLS) in Hampton Roads and Virginia outlines both the magnitude of
the recent increases, and how different industries fared.


From 2019 to 2020, average weekly wages in Hampton Roads increased by 8.2%, and from 2020 to 2021, they
increased by 4.4%, nearly half of the increase from the previous year, but still well above the annual average increase
(between 2001 and 2018) of 2.8%. Across the Commonwealth, the story was similar, with average weekly wages
increasing by 7.6% from 2019 to 2020, and by 4.3% from 2020 to 2021.

 

Line Graph depicting Average Weekly Wage in Hampton Roads and the State of Virginia

In Hampton Roads from 2019 to 2020, the Information industry saw the largest increases in average weekly wages
(11.4%), followed by Retail Trade (9.6% increase) and Finance & Insurance industry (9.4% increase). During the
same year, only the Utilities industry saw a decline in wages, -0.2%. The following year (from 2020 to 2021), the
Accommodation & Food Services industry saw the largest increase in wages, growing by 14.4%, followed by Leisure &
Hospitality industry with wages growing by 12.6%. This variance in wage increases by industry tracks closely to consumer
behaviors during the course of the pandemic. As consumers were spending more time at home due to lockdowns in
2020, they spent more money on goods, driving up demand for retail workers during 2020, and therefore driving up
wages in the retail industry. And in 2021 as vaccines became readily available and restrictions were lifted, consumers
were shifting their spending back towards things like vacations and eating out, driving up wages in the food services
and leisure and hospitality industries.


In Virginia from 2019 to 2020, the Arts, Entertainment & Recreation industry saw the largest increase in wages, 18.5%,
and was the only industry in Virginia to see average weekly wages decline the following year, by 2.5%. Education
Services saw the second largest increase in 2020 at 11.9%, followed by Finance & Insurance at 10.6%, Information
at 9.2%, and Retail wages growing by 8.9%. Similar to wage growth in Hampton Roads, statewide wages in both
the Accommodation & Food Services and Leisure & Hospitality industries also saw the largest year-over-year wage
increases in 2021 with a 12.4% and 9.9% increase respectively, while the Information industry also saw a large increase
of 10.1%.


While overall average weekly wages in both Hampton Roads and Virginia rose at roughly 4.4% in 2021, due to rapidly
rising inflation, real wages (wage adjusted for the impact of inflation) grew by less than 0.5%, meaning that taking into
account the increased prices of everyday goods, relative wages in 2021 have increased only slightly.

If you have any questions or comments, please feel free to contact us at krainone@hrpdcva.gov or ggrootendorst@hrpdcva.gov.

To view August's full economic monthly report, click HERE.