Visitors enjoy swimming in Montana’s Glacier National Park. States with scenery, recreation and relatively lower costs — including Montana, New Hampshire and Florida — have seen some of the fastest-rising wages since the pandemic began, according to a Stateline analysis. (Photo by Keila Szpaller/Daily Montanan)
The average U.S. wage is about the same as it was at the end of 2019, after adjusting for inflation. But workers in some states have seen a sharp increase in pay, especially in scenic areas that are attractive to remote workers and where there are labor shortages.
In Montana, for example, the average wage has risen 28.3% since the pandemic, far outpacing the national inflation rate of about 19% in that time. That works out to an average increase of $260 a week, to $1,178. No other state saw such a big gain, according to a new Stateline analysis of Bureau of Labor Statistics data. The figures are from 2023, the latest available.
Montana attracts remote workers because of the beauty of its parks and mountains. Workers are also attracted by salaries comparable to those in more expensive areas.
Other scenic spots have also attracted home workers. Average wages have risen significantly in these states, though some states had relatively low wages to begin with. These include New Hampshire (wages up 28%), Florida (27.3%), Washington (27.2%), Maine (26.7%), Vermont (26.5%), Utah (25.7%), Arizona (24.8%), and West Virginia (24.6%).
Wages rose slightly less than the 19.3% inflation rate in North Dakota (16.8%), Wyoming (17.5%), Connecticut and Michigan (18.1%), New Jersey (18.2%), Maryland and Rhode Island (18.6%), Minnesota and New York (18.9%), and Oklahoma and Pennsylvania (19%).
Nationally, inflation-adjusted earnings rose sharply early in the pandemic as low-wage service workers lost jobs and employers competed for scarce essential workers. While wages continued to rise, inflation-adjusted wages began to decline sharply in late 2020 and 2021 as inflation took a bigger bite.
The inflation-adjusted wage growth early in the pandemic was somewhat misleading, both because 20 million low-wage service workers temporarily left the workforce and because prices for certain items, such as gasoline, temporarily fell, noted Josh Bivens, chief economist at the left-leaning Economic Policy Institute in Washington, D.C.
As the economic recovery continues, workers are doing somewhat better, Bivens said.
“On the one hand, all other things being equal, you’d like to see better wage growth over four and a half years,” Bivens said. “On the other hand, we’ve had a terrible economic shock over that period. Compared to other recessions and recoveries, this is an excellent wage performance, even with inflation.”
In 2019, the average weekly wage in Montana was $918, 45th among states. The lowest figure, $1,178, ranks 39th. Montana’s natural beauty has attracted new residents from higher-wage states like New York and California, and many of those who worked remotely brought their higher salaries with them.
Compared to other recessions and recoveries, this is excellent wage performance, even with inflation.
– Josh Bivens, chief economist, Economic Policy Institute
Competition for workers in Montana is fierce, driving up wages as it has in other newly popular locations. The highest wage growth in Montana has been among people without college degrees, a group that has seen some of the highest gains nationwide as restaurants and hotels have struggled to find workers after the pandemic peaked, said Christopher Thornberg, an economist at Beacon Economics, an economic research and advisory firm that tracks economic trends in Montana.
Montana’s economy is heavily focused on services, and wages could fall again this year because of the unusual spike, Thornberg said. But, he added, “there’s little doubt that incomes in Montana are higher than they’ve been in a long time, even as they’re coming down a bit.”
In Florida, where wage growth was nearly as fast as Montana, competition for workers has also driven up wages, with the unemployment rate being lower than the national average since 2017, said Hector Sandoval, director of the Economic Analysis Program at the University of Florida’s Bureau of Economic and Business Research.
According to Christopher McCarty, the agency’s director, Florida, like Montana, is a magnet for well-paid home workers from New York, for example in sectors such as finance.
Meanwhile, wages are stagnating in some major coastal cities, where people are struggling to hold on to well-paying jobs, experts say.
“Coastal cities have had a particularly hard time creating new jobs,” said August Benzow, research director at the Economic Innovation Group, a bipartisan public policy organization. The group analyzed the improved fortunes of “left-behind” counties — counties with lagging population and income growth from 2000 to 2016 — that suffered from high-paying jobs concentrated in big cities.
“On the positive side, the lagging counties — particularly the more rural ones — have recovered quickly. It remains to be seen whether these areas will continue to see improved growth rates,” Benzow said.
This story originally appeared on Stateline. Like Maine Morning Star, Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger with questions: info@stateline.org. Follow Stateline on Facebook and X.
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