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Good news and bad in job figures

BUFFALO’S BUSINESS

Published:January 29, 2012, 12:00 AM

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Updated: January 29, 2012, 7:03 AM

Here’s some good news for workers: Wages have started to creep higher again.

But before you start doing handstands, the key word there is “creep.”

With the job market bouncing back a bit, the average wage and salary per job in the Buffalo Niagara region grew by 2.1 percent in 2010, according to new federal data.

That was the biggest increase since the recession hit in 2007, and more than double the skimpy 0.8 percent increase in 2009, according to data recently released by the U. S. Bureau of Economic Analysis.

“The economic outlook for Western New York, at least for the Buffalo metropolitan area, may be starting to turn around,” say Canisius College economists George Palumbo and Mark Zaporowski, in their latest quarterly look at the region’s economy.

“It is a positive reflection of an increase in earnings and purchasing power for workers in the region,” the professors say. “It can also translate into stable housing values and consumption.”

Now here’s the bad news: The increase barely is keeping ahead of the rising cost of living. Once you factor that in, the real increase in wages and salaries is closer to 0.4 percent.

And it doesn’t appear that the pace picked up too much last year. A separate report by the federal government that measures wages in a different way found that the average weekly wage in Erie County grew by just 1.7 percent from June 2010 to June 2011.

Even worse, the growth in weekly wages didn’t come close to keeping pace with the rising cost of living. In real terms, wages actually fell by about 0.7 percent during that 12-month period that ended as spring turned to summer.

Our weekly wages, which average $782, only grew a little more than half as fast as the 3 percent increase nationwide. And our wages are $109 a week less than the national average of $891, according to the U. S. Bureau of Labor Statistics.

In essence, our paychecks have been stagnant since the recession hit at the end of 2007. The average wage and salary per job has grown by less than 1 percent during that entire time, after

you adjust for rising prices.

The scant growth in wages and salaries, which inched up to an average of $40,420 in 2010, reflects the weak growth in our still-sputtering economy and the especially painful blow it has delivered to local manufacturers. The continued battering of the local factories, which has cost the region one of every six manufacturing jobs since the end of 2007, especially hurts because those positions tend to pay better than most.

At local factories, total compensation, which includes wages and salaries, as well as employer contributions to pension and insurance funds, plus government social insurance programs, kept dropping in 2010, although it was nowhere near as bad as the plunge the region’s manufacturers endured in 2009.

Total compensation from the region’s factories slid by 1.4 percent in 2010, which was far better than the gut-wrenching drop of almost 14 percent in the dark days of 2009, when the auto industry was reeling. Still, our compensation from factories still was dropping in 2010, even when it was growing by 1.8 percent nationally.

That left the total compensation generated by local manufacturers at its lowest level since at least 1998—as far back as the federal data goes—and likely long before that.

The good news is that factory employment locally stabilized last year, and the region’s auto plants landed commitments for major new investments that could bring back hundreds of auto industry jobs later this year and beyond.

There also were bright spots locally. Compensation from accommodation and food service jobs jumped by almost 9 percent in 2010, which was far faster than the industry’s growth in the rest of the country.

Overall compensation for professional, scientific and technical services jobs, as well as positions in the retail, health care and social services sectors also grew faster than the national average.

So did the most potent segment of the local job market—government, where total compensation grow by 3.6 percent. Compensation from government jobs accounts for more than 23 percent of all earnings locally, which is only a little less than the compensation from all of the jobs in the region’s next-biggest sectors— manufacturing, health care and social services —put together.

Still, local wages and salaries remain well below the national average of $47,045 and the gap is widening, which is bad news for the region because it means less money to boost the area’s economy. The gap, which was about 12 percent in 2001, now tops 14 percent.

And while the rest of the country still is adding jobs, the Buffalo Niagara region actually has lost jobs during the past two months. That’s an ominous sign. If it’s anything more than a temporary blip, it could bode ill for wages in the coming months by giving employers even more of an upper hand in determining pay.

drobinson@buffnews.comnull

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