New Economic Indicator from Square Shows Wages Continue to Rise, but the Post-Pandemic Job Boom is Over
Square launches the Square Payroll Index, a new economic indicator that uses wage data from Square to reveal insights about the hourly earnings of retail and restaurant workers across the United States
OAKLAND, CA: Today, Square unveiled the Square Payroll Index, a new economic indicator that uses data from Square’s labor management and payroll processing solution to provide the latest information about wage growth in the retail and restaurant industries. The Square Payroll Index is designed to allow anyone, from business owners to policymakers and media, to track wages and earnings trends nationally and at the metropolitan level.
Square Payroll Index data reveals that, despite slowing growth in recent months, average hourly earnings, which include tips and overtime pay, continue to grow faster than base wages and outpace inflation. According to the Square Payroll Index, the median food and drink worker earned $13.64 per hour in base wages in September, totalling $17.44 including tips and overtime. The median retail worker earned $15.80 per hour in base wages, which increased to $16.31 including tips and overtime.
Square Payroll processes wages for hundreds of thousands of hourly workers every month, totalling more than $6 billion in annual payroll and giving Square a unique view into wages and earnings for this important segment of the American economy. A significant percentage of these employees are retail salespeople and restaurant workers, given Square’s strength in these verticals, which are among the most common occupations in the United States according to the Bureau of Labor Statistics.
“Retail and restaurant workers, as well as the businesses who employ them, are part of the bedrock of the American economy,” said Saumil Mehta, Square’s Head of Point of Sale and Omnichannel. “We know that hiring and retaining good staff is a persistent challenge for our sellers. By tapping into Square Payroll data to report on wage growth in these key sectors, we can help our sellers continue to build strong teams and also add a valuable new metric to the public conversation.”
According to the Square Payroll Index, growth in average hourly earnings has fallen below the 2019 average (5.2% vs. 6.5% in 2019). While base wages continue to grow at a higher rate (4.6% vs. 4.0% in 2019), that growth has cooled in recent months and continues to slow. Still, Square data points to a strong job market for workers in these sectors.
“The Square Payroll Index shows that, while hourly wages continue to slowly rise, the post-pandemic job market boom is over,” said Ara Kharazian, Square’s Research and Data Lead. “According to our data, growth in average hourly earnings has fallen since its peak in early 2022 and is now below the 2019 average. Despite the end of this boom, our research shows that the job market is strong, and wage growth has outpaced inflation for the twelfth consecutive month.”
Workers in the food and drink sector continue to see faster growth than workers in retail. This September marks the twelfth consecutive month in which Square Payroll data showed growth in average hourly earnings outpacing inflation, last reported at 3.7% for August of 2023.
Methodology: The Square Payroll Index measures compensation of service workers in the retail and food and drink sectors in the United States using data from Square Payroll. Our sample includes more than 200,000 employees working at retail and food and drink establishments that use Square’s platform. Our methodology is broadly similar to that used by the Federal Reserve Bank of Atlanta’s Wage Growth Tracker. Read our full methodology here.
Square makes commerce and financial services easy and accessible with its integrated ecosystem of commerce solutions. Square offers purpose-built software to run complex restaurant, retail, and professional services operations, versatile e-commerce tools, embedded financial services and banking products, buy now, pay later functionality through Afterpay, staff management and payroll capabilities, and much more – all of which work together to save sellers time and effort. Millions of sellers across the globe trust Square to power their business and help them thrive in the economy. For more information, visit www.squareup.com.