We’re No. 5! Seattle Outperforms in PayScale’s Wage Index

1/19/12Follow @curtwoodward

Hey Seattle, are you feeling above average?

You should, at least in the paycheck department, according to the latest report tracking American wages from Seattle-based PayScale.

The greater Seattle area came in as the fifth-best city for wage growth in 2011, one notch ahead of the San Francisco area. Yep, that’s right—we beat the Valley at something.

Specifically, Seattle’s rating in the PayScale Index for the fourth quarter was 1.6 percent higher than a year earlier, slightly better than San Francisco’s 1.4 percent. Nationally, PayScale pegged wage growth at 1 percent.

Unsurprisingly, the jobs that led the way for wage growth nationally were generally highly skilled professions in the energy or technology sectors.

“Seattle, San Francisco, and Washington, D.C. are major tech hubs and saw good wage growth over the last year,” PayScale noted on its blog (D.C. was fourth nationally).

PayScale doesn’t rely on the usual government agency data for its analysis, but instead gathers its information via submissions from some 30 million people in full-time, private-sector work. More than 300,000 profiles are analyzed each quarter to determine the index, which is given for different industries, locations, and so on. Much more on the methodology here.

For a comparison, the federal government’s separate measure of private-sector wage growth showed similarly modest growth in the last comparable quarter.

With the frenzied hiring competition for people with software and other digital skills, it’s no surprise that tech jobs continue to pay well—and that the Seattle area does well nationally.

But why would the Emerald City’s index slightly outperform the San Francisco area’s? It’s partly because of economic diversification, with a potent manufacturing sector tied to Boeing—still the largest private employer in Washington state by far—and “a less-damaged construction industry than is typical nationally,” PayScale said.

The national summary for 2011 shows some optimism for the economy at large—another sign, perhaps, that we’re continuing to slowly shake of the malaise from the near-fatal economic collapse that sparked the Great Recession.

Labor economists had some good news last month when the unemployment rate fell to 8.5 percent-the lowest since February 2009—but the overall joblessness rate is still high by historic standards

“For the first time since 2008, wage increases are being seen across the board and not just for workers in high-tech and energy industries. Granted, these increases are small compared to those seen pre-2008, but they are a sign that the economy is on the right track,” PayScale analytics director Katie Bardaro said.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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