- Changes in hourly pay for flexible work varied widely across American metro areas in the past year.
- Migration and consequent changes in labor supply may be the most important factor driving these changes.
- Minimum wage increases and reactions to inflation probably contributed to the differences as well.
One of the biggest economic stories of 2022 was the horse race between pay and consumer prices. Some workers won the race, with pay that outpaced prices to yield higher spending power. Others found themselves worse off than before. These differences were geographic as well as demographic.
We've compiled data from the transactions on our platform to show which metropolitan areas experienced the biggest changes in pay for hourly work in the past year. Here we're looking at five of the most commonly booked roles on our platform: line cook, event server, and dishwasher in the hospitality sector; and general labor and entry-level warehouse associate in other sectors.
In each metro area, we've averaged the year-on-year changes in mean hourly pay for these roles. Here's what the overall picture looks like in ten metro areas spanning the United States:
Northern metro areas like Chicago, New York, and Seattle had some of the biggest increases in hourly pay. Southern metro areas including Phoenix, San Diego, and Austin had decreases, even during a tight nationwide labor market. These results seem to correlate with changes in labor supply – working-age people moving from northern cities to the cheaper, sunnier South.
As a major tourist destination, Miami may have seen pay rise as a result of the squeeze between a deluge of consumer spending and the shortfall in hospitality workers. Just as people began to spend more on leisure and hospitality last spring, Miami's workforce in the sector was 8% smaller than before the Covid-19 pandemic began.
Indeed, Miami was one of the few markets where the changes in hourly pay were larger for the hospitality roles than for the other roles. This is what the data look like with the roles broken down into two groups:
The Miami area had the second-largest increase in hourly pay for the hospitality roles, behind only Seattle.
Both of these metro areas also had increases in the minimum wage to start 2023. In fact, so did all of the states where these metro areas were located except for Georgia and Texas. Still, the hourly rates our Pros receive in most markets are much closer to living wages than to minimum wages.
And that brings us back to prices. Inflation was severe during 2022, but again not the same in each metro area:
Indeed, the decrease in hourly pay in the Bay Area may have something to do with the fact that the area had the smallest increase in consumer prices. (Note that there are no publicly available data for the Austin area.)
Separating out the effects of policy, prices, and migration on hourly pay would require a more detailed analysis. But these are some of the factors that make generalizing about American labor markets a difficult and perhaps even pointless task. For detailed charts and time-series data on hourly pay rates for a variety of roles in markets across the United States and Canada, please visit our Labor Market Data page.
These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 2/9/2023 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:
- $0.11 rise in hourly pay
- 0.6% point drop in share of short-notice shifts
- 0.9 hours rise in hours per existing worker