Wage growth by sector, and what a national average hides

Both approaches to sector wage growth work. What differs is what they cost you, and the cost is what this sets out.

An average of divergent things

National wage growth combines sectors experiencing acute labour shortages with sectors where pay has been flat for years. The single figure therefore describes almost nobody's experience and is routinely used as if it described everybody's. Statistics agencies publish sector-level breakdowns precisely because the aggregate is not informative at an individual level.

Those breakdowns are the ones worth looking at before any pay conversation.

Composition moves the average on its own

If lower-paid jobs disappear during a downturn, average pay rises without any individual receiving more. The reverse happens when large numbers of lower-paid roles are created.

For most people, this composition effect has produced misleading headline movements in several periods. It is one reason median and distributional figures are more useful than means.

Public and private sectors diverge on different timetables

Public sector pay is typically set through annual settlements and funding decisions, which respond slowly. Private sector pay responds faster to labour shortages in both directions. That produces long periods where one leads and the other catches up, or does not.

In practice, comparing across the two without accounting for that lag produces false conclusions.

Bonuses distort the series

Where a statistical series includes bonuses, timing changes in bonus payments can move reported growth sharply without any change in regular pay. Most agencies publish figures both including and excluding bonuses for this reason. Using the regular pay series is generally more informative for questions about ordinary earnings.

Media coverage frequently uses whichever figure is more striking.

Use it as evidence, carefully

Sectoral growth data is useful in a pay conversation because it describes the employer's actual labour market. It is more persuasive when paired with the employer's own current advertisements for comparable roles. Quoting a national figure invites the accurate reply that it does not describe this sector.

Bringing the right series is most of the preparation.

None of this is a substitute for talking to a clinician if something feels wrong.

Real terms is the second step

Any nominal growth figure means little without comparing it to price changes over the same period. Statistics agencies publish deflators that make the conversion straightforward.

A sector with strong nominal growth during high inflation may still have lost ground. Doing both steps produces a claim that is difficult to dismiss.

Side by side

The takeaway

Use sector data, not the national headline. The aggregate describes an economy, not a job.

Pick the one that costs you least, and let the rest wait.