Brief Wages and Benefits

Wages

Median Wages

Initially, the COVID-19 pandemic suppressed wages. According to the Bureau of Labor Statistics, the December 2021 median wage recovered to prepandemic levels at $1,008 per week. However, this recovery does not take inflation into account. When adjusted to 1982-84 dollars, the median wage for December 2021 was $362 per week, down from $393 per week before the onset of the pandemic. Real, or inflation-adjusted wages, are still below prepandemic levels.

When looking at compensation by sector, there is much more variance. Although no data is available on low-wage work specifically, compensation in industries often associated with low-wage work and the worker shortage has shown substantial growth in the last year. The leisure and hospitality industry has increased total compensation by 8% over the last year. The service industry has increased total compensation by 7.1%. This is compared with the average compensation increase of 4% for civilian workers.

Minimum Wage

Thirty states, three territories and Washington, D.C., have a minimum wage above the federal minimum. In 2022, 25 states, Puerto Rico and Washington, D.C., have increased or are set to increase their minimum wages.

Benefits

Employee benefits fall into many categories, but the most common benefits tend to be health insurance, retirement help and paid leave. While health and retirement benefits are well established in the workplace, paid leave is a benefit with room for expansion. Paid leave encompasses family and medical leave as well as sick leave. In the aftermath of the COVID-19 pandemic, states increasingly are requiring employers to provide paid family and medical leave as well as paid sick leave.

Paid Family and Medical Leave

Paid family and medical leave covers longer-term care for oneself (medical) or ill family members or a new child (family). Paid family and medical leave supports workers by paying them partial wages for, generally, six to 12 weeks. Currently, nine states have mandatory family and medical leave.

Paid Sick Leave

Paid sick leave covers short-term health needs, like temporary illness and preventative care. It can also cover short-term care for oneself or a family member. Unlike paid family and medical leave, workers usually earn sick leave. It is typically accrued based on hours worked. For example, a worker may earn one hour of sick leave for every 40 hours of work. Currently, 15 states have mandatory paid sick leave.

Workforce Attraction, Retention and Expansion

As the labor shortage continues and people move between and across states, some state governments are looking at strategies to both attract new workers and retain their current workforce.

Workforce Attraction

With massive population shifts across the country, states are looking to attract these migrating workers. North Dakota, for example, recently launched its statewide talent attraction project. The state has an unemployment rate of 2.3% and over 30,000 open job listings. As a result, North Dakota does not have the population to grow economically. The goals of its talent attraction project are to invest in a worker pipeline and to market the state nationally as a desirable place to live and work.

Other states are providing paid incentives for workers to move to the state. In 2021, West Virginia launched the Ascend West Virginia program as a collaboration between the state, the University of West Virginia and corporate partners. The program provides $12,000 for an applicant to move to and stay in the state. Other localities, including Tulsa, Okla., Savannah, Ga., and Muscle Shoals, Ala., and the state of Vermont have started similar programs to attract remote workers.

Workforce Retention

In addition to attracting new workers, states have invested in retaining their existing workforce and working-age adults. Maine recently launched a program to provide recent college graduates with a year of service. The Maine Service Fellows Program is designed to attract and retain individuals with a college degree and to use their skills to benefit the citizens of Maine.

Workforce Expansion

The labor force participation rate for women is the lowest it has been since 1988. To provide opportunities for women to rejoin the workforce, many states have invested millions of dollars in child care. Maryland Gov. Larry Hogan has proposed an additional $50 million in grants to child care centers in the fiscal year 2023 budget. New York Gov. Kathy Hochul proposed allocating $900 million dollars to help fund the state’s child care centers as well. By funding child care more generously, states hope to increase support for working mothers and provide them with opportunities to reenter the workforce.

States are also expanding their workforce horizons by reaching out to underrepresented populations, such as working mothers, the formerly incarcerated and people with disabilities. Some states have promoted programs that help these populations enter the workforce for the first time.