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Wages in the Buffalo Niagara region are about 7 percent lower than the national average and lower still than wages paid in other upstate New York cities, according to federal data released Thursday.

Workers in Buffalo Niagara earn an annual average of $42,720, or $3,070 less than the national average, and about 20 percent, or $10,860, less than the statewide average, which is inflated by the heftier wages paid to workers in the more costly New York City area, the U.S. Bureau of Labor Statistics reported.

While the New York City and Albany areas have higher average wages than the Buffalo market in part because they employ more workers in better-compensated sectors, such as financial services and state government, wages here also are lower because of the cost of living, economists say.

The bureau’s data was from May 2012.

Whether looking at annual or hourly wages, the average pay of workers in Buffalo Niagara lags behind the pay of workers in the New York City, Albany, Syracuse and Rochester areas.

John Slenker, a regional economist for the state Labor Department, said the federal wage data is in line with similar statistics tracked by the state agency.

Slenker said differences in wages among regions are based on two factors: differences in pay, which can be driven by differences in the cost of living, and differences in the dominant industries. “You have both of those things happening,” he said.

Yes, Slenker continued, the pay levels in Buffalo Niagara are lower than the pay levels in other upstate cities, but the difference is modest.

And where there are big differences in pay, such as between Buffalo and New York City, a lot of this gap is driven by the difference in the cost of housing, entertainment and food between the two areas, he said. “That’s the other side of it,” Slenker said.

Average hourly wages in Buffalo-Niagara Falls were $20.54, or $1.47 less than the national average and $5.22 less than the statewide average, which is swollen by the high pay earned by downstate workers.

Comparing this region with other upstate regions, workers in Buffalo Niagara earn $2.37 less per hour than workers in the Albany metro area, 88 cents less than workers in the Syracuse area and 74 cents less than workers in the Rochester area, the bureau found.

Pay levels in the Albany area are boosted by the number of workers employed by the state government, said Martin Kohli, the bureau’s chief regional economist. And in the New York City area, where the average hourly wage is $8.09 higher than here, the dominance of the financial services sector also drives up the rate of pay for workers in many supporting fields, such as information technology, he said. “It’s having an indirect effect on other wages,” Kohli said.

While Western New York is home to a number of employees of commercial banks, those don’t pay as well as Wall Street banks, Kohli said. And the average annual wage for education, training and library workers was $47,480, or $3,730 lower than the $51,210 paid to their peers nationwide.

“Those are all making significantly less in Buffalo than the national average,” Kohli said, referring to these and other white-collar jobs.

But workers in the construction and protective service fields – a category that includes police and correction officers – earn more here than the national average, the bureau found.

email: swatson@buffnews.com