September 2, 2026
The Upjohn Institute New Hires Quality Index (NHQI) shows that the inflation-adjusted hourly earnings power of individuals starting a new job fell 0.2 percent between June and July 2026, to $23.00. The index has risen 0.4 percent since last July but remains 0.3 percent below its record peak, reached this past February.
Hiring volume has been steadily growing, with July’s reading up 1.0 percent over the month, 4.4 percent over the year, and 5.3 percent from the recent low in February 2025. Adjusting for population growth, hiring rates have risen 3.3 percent since last July, but they remain below where they were in early 2024. Although hiring has picked up over the past year without a decline in the earnings power of these new jobs, the labor market remains tepid.
In this annual Labor Day edition of the NHQI, author Brad Hershbein looks back at real wage growth over the past few years. This month’s press release examines trends in actual, reported wages of newly hired workers and compares them with the NHQI.
As regular readers will know, the NHQI does not measure the actual wages of newly hired workers. Rather, it measures their earnings power as proxied by their occupation and demographic characteristics. While there are pitfalls to using actual wages of new hires, they can sometimes be illustrative, particularly when compared directly with the NHQI.
NHQI trends tend to be gradual, given the way the index is constructed, while actual self-reported wages of new hires have tended to change in rapid spurts. As profiled in earlier editions, there have been periods of rapid wage growth in the late 1990s, the mid-2000s, in 2015, in early 2019, and most recently during the pandemic recovery from late 2020 through late 2021.
At other times, wage growth has stalled—as it has since 2022—or even turned negative. On net, inflation-adjusted wages of newly hired workers were largely stagnant between 2002 and 2014, with slight dips in 2005 and 2014.
The past four and a half years have represented a period of stagnant growth in inflation-adjusted wages following the frenzied pace of the early pandemic recovery. The current average real wage of new hires, $25.18 in July 2026, is down 0.4 percent from its level in July 2022.
Nonetheless, it remains 8.1 percent above its level immediately before the pandemic, in February 2020, and 15.1 percent above its level in July 2016. Annualized growth in inflation-adjusted wages of new hires over the past decade is about 1.4 percent, faster than the 1.1 percent growth over the preceding decade.
However, the recent slowdown, now approaching 60 months, is cause for concern. The spurt of rapid wage growth between 2015 and 2021 increasingly appears to have been an anomaly, and we seem to be stuck in stagnation again.
To learn more, including what happens when the long-term data are broken down by income percentile, check out the report, interactive charts, and full data at upjohn.org/nhqi.