It wasn’t that long ago that the younger workers were being punished by prospective employers for a lack of experience. According to the ADP Workforce Vitality Report for the first quarter of 2016, it pays to be young again – and wages for full-time workers are accelerating for workers under 25 and in the 25 to 34-year-old groups the fastest.

Annual wage growth is looking better for full-time workers. Those under 25 were seeing 9.2% annual wage growth for job holders and 11.1% for job switchers. Those in the 25 to 34 age group were seen annualized wage gains of 7.2% for job holders and 10.0% for job switchers.

Sadly, for those who are 55 and over, that group saw wage gains of 2.7% for job holders and 2.2% for job switchers. Be advised that most of the overall wage growth of 6% for job switchers can be attributed to the below 35 age group.

This acceleration in wages was shown in almost all industries and in all age groups among full-time workers. It appears that employers are reacting to a tightening labor market by boosting wages to retain talent. Depending upon the age group, it turns out that job holders fared better than job switchers.

Ahu Yildirmaz, VP and head of the ADP Research Institute, was quoted:

Year-over-year wages grew substantially for job holders in Q1 2016, rising from 4.1 percent in Q4 2015 to the current 4.6 percent. This may be a signal that continued employment growth is leading to a smaller pool of available talent, in turn motivating employers to increase wages to retain experienced workers.

ADP broke out the best of the best, showing that those 24 and younger, in IT, with some tenure, by sex, and at larger companies were the winners. The report said:

The best wage growth is in the West, in the Information industry, among women, younger workers, those with 3-5 years of job tenure and those employed at the largest companies.

The status of the job a worker switches from matters. If the change is from a full-time job to another full-time job, switchers experience moderate to high growth in their hourly wages. Most major groups saw raises of full-time workers leaving to other full-time positions – except in natural resources and mining where wages were seen down by 7%. ADP said:

Wage growth for full-time job holders accelerated in every industry with the exception of Natural Resources and Mining. The highest acceleration occurred in Information, where the growth increased by 0.8 percentage points from last quarter on a year-over-year basis. Other industries that have experienced strong acceleration in wages include Leisure/Hospitality, Finance and Trade. In the case of Leisure/Hospitality and Trade, the implementation of higher minimum wages in some states and municipalities may have impacted the first quarter wage growth. Leisure/Hospitality wage growth accelerated to 5.7 percent over the past four quarters, while Trade wage growth accelerated to 4.3 percent.

The status of the job a worker switches from matters. If the change is from a full-time job to another full-time job, across all industries except Natural Resources and Mining, switchers experience moderate to high growth in their hourly wages. On the other hand, moving from a part-time to a full-time job across the industries generally results in a decrease in hourly wage. This may reflect that, when switching from part time to full time, the availability of benefits, more hours leading to increased take home pay and the stability of a more permanent job weigh more heavily than the hourly wage alone.

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