Workers across Dallas-Fort Worth saw more than a 5% pay bump this year, a rate that outpaces the national average by nearly half a percentage point, according to the U.S. Bureau of Labor Statistics.
But even with a boost, workers might still feel like they’re playing catch up. Inflation rates are now eye-to-eye with compensation costs, slowing to 5% throughout the same time period, after hitting a recent high of 8.5% in March 2022.
The wage growth puts both employees and employers in a pretty good spot, said Mallory Vachon, a senior economist at LaborIQ, a Dallas software company.
“Having those numbers finally come into balance, it’s certainly something that a lot of people have been looking for,” Vachon said.
University of Houston Public Affairs professor Sunny Wong said an important indicator of people’s well-being is whether inflation is controlled. As inflation has quickly increased over the last two years, compensation needs to continue to be adjusted, he said.
“The concern I would say is, would that be enough?” Wong said. “We just barely catch up with inflation.”
To live comfortably as an individual with no children in Dallas-Fort Worth, workers need to earn $64,742 after taxes, according to a March analysis by SmartAsset, a financial technology company.
Despite scoring nationally competitive compensation, North Texas inflation rates on food prices are at nearly 9% and rent at 11%, Wong said.
Vachon said it’ll take time for people to feel the bump in their wallets.
“There still was that imbalance for a longer period of time where the cost of goods and services was rising more than people’s paychecks, which are still rising really quickly,” Vachon said.
A year ago, Dallas employers saw compensation costs grow 4.5% percent, said Michael Hirniak, the Bureau of Labor Statistics’ regional commissioner.
Nationally, employers were projecting to spend more on their employees’ salaries and wages in November, according to a survey by global consulting firm Mercer released in March. The increases in compensation, however, represent the largest pay hikes employers have provided since the 2008 financial crisis.
“Employers are continuing to invest in compensation to combat prolonged tight labor markets,” said Lauren Mason, senior principal at Mercer. “But they are doing this with more prudence than what we saw in 2022.”
A majority of the 4% total compensation increases were attributed to annual merit increases.
Texas employed nearly 600,000 people in February as more than 561,000 employees left their posts. Most of the job separations, or 439,000 came from workers quitting, while the rest are from employees being laid off or retiring.
As employers all over dealt with record resignations, they offered large pay increases to attract talent. Dallas-Fort Worth is no different, Vachon said.
While North Texas has seen an increase in working-age residents and relocated companies, adding jobs at a robust pace, employers have struggled to find and retain talent.
The state had 888,000 vacant jobs in February, down from the more than 940,000 open positions available in January.
The competition and demand for talent is keeping up with the supply, Vachon said, keeping wage growth strong across the state and Dallas-Fort Worth.
“Despite evidence that things are starting to cool down a little bit, we still have a lot of economic growth and labor market activity going on here,” Vachon said.
Some industries fared better than others in compensation. The life sciences, energy and services sectors led with 4.5%, 4.4% and 4.4% total compensation increases, whereas health care and retail and wholesale lagged behind with 3.6% total compensation increases.
Mason credits recent pay transparency legislation to the nationwide spike in compensation. With companies required to provide pay ranges for job posts, workers have more information about the market’s salaries. Texas has no such law requiring pay ranges on employment listings.
“This will continue to put more pressure on employer programs, and combined with a continued tight labor market, reinforces the need for continued focus on competitive and equitable compensation,” Mason said.