Looking for a raise? Maybe you should move

Mike Kane | Bloomberg | Getty Images Seattle skyline

Mike Kane | Bloomberg | Getty Images
Seattle skyline

If it’s been awhile since you’ve gotten a raise, you might want to consider moving somewhere else.

Despite a stubbornly slow pace of overall wage gains in the ongoing U.S. economic recovery, the average readings that make headlines mask a wide variation in the raises and pay cuts seen by workers from one part of the country to another.

The latest report from the government Friday showed a meager two-tenths percent gain in hourly earnings in July, after a flat reading in June. That left the annual growth rate at just 2.1 percent.

“There is still absolutely no sign whatsoever of any meaningful acceleration in that growth rate,” said Paul Ashworth, chief U.S. economist at Capital Economics.

Last week, a separate report showed that an alternate measure of compensation, the employment cost index, posted its smallest increase in the 33 years those records have been kept.

Read More Weak recovery makes for wage winners and losers

That’s not supposed to happen as labor markets tighten, employers have a harder time filling jobs and workers find themselves in a better bargaining position for higher wages. Since peaking in the depths of the recession, the U.S. unemployment rate has fallen nearly in half, to 5.3 percent last month. New claims for unemployment insurance recently fell to their lowest level since 1973. And a number of large companies and state and local governments have also begun boosting the minimum wage.

So why aren’t workers seeing a bump in their paychecks?

In fact, millions of American workers wages have seen their wages rise rapidly in the last year. And millions more have seen their paychecks shrink. It all depends on where they’re working.

Take Texas. The median weekly paycheck in College Station, home to Texas A&M University, rose by 25 percent in the 12 months ended in June, the latest data available, to $873. As of June, the jobless rae there was just 3.9 percent, well below the national average of 5.3 percent.

But less than 300 miles away, in Texarkana, median earnings were down nearly 20 percent in the 12 months ended in June, at $666 a week

In areas where wages are relatively stable, there are great variations in the size of the median paycheck. In San Jose, California, in the heart of Silicon Valley, the median weekly paycheck came to $1,440. Further south, in El Centro, median weekly earnings amounted to just $434 in June.

While the drop in the national jobless rate hasn’t produced upward pressure on wages, the workers in areas with the tightest job market are seeing the biggest raises. And wage gains are slower in areas with higher jobless rates.

In Seattle, for example, where the jobless rate is below the national average, total compensation (including benefits) rose by more than 4 percent in the 12 months ended in June. In Detroit, on the other hand, where the jobless rate is higher than average, compensation rose just 1 percent in the same period.

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