Despite a 6 percent decline in employment between 2019 and 2021, total wages earned in the District of Columbia in that same time grew by 7 percent. And, average wages increased by 14 percent—faster than the inflation rate.
What is causing these trends? The pandemic has had a disproportionate impact on service-based industries, while office-based industries have, in contrast, been able to easily adapt by shifting to remote work. As a result, many low-wage jobs are being replaced by high-wage jobs. Recent BLS data confirm this trend, showing the share of jobs in D.C. with a median annual wage greater than $150,000 has increased from 8.1 percent in 2019 to 17.1 percent in 2021.
Another explanation for this trend is that throughout 2021, there were historically high levels of job openings relative to total employment. As a result, the labor market favored job seekers, making it easier to negotiate higher salaries or other benefits, particularly as inflation was increasing.