Size Matters: How Companies Pay Their Workers
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I'm J.R.
Whalen in New York. The Wall Street Journal analyzed how public companies pay their employees, and it has little to do with how big or small the company is. We'll run the numbers in a moment. First, these money headlines. The payroll processing company ADP says 219,000 private sector jobs were added to the U.S. economy in July. That was the largest number since February. And of the 219,000 medium-sized businesses, which have anywhere from 50 to 499 employees... added 119,000 jobs, more than small and large businesses combined. Analysts point to tax cuts and increases in government spending as spurring on the hiring, and they say that tariffs have yet to impact the labor market. The Wall Street Journal Daily Shot column takes a look at several current economic indicators and points out that consumer spending continues to be robust, as does consumer confidence, mainly due to the red-hot labor market.
and the Federal Reserve concurs, announcing Wednesday it's holding interest rates steady, and it acknowledged that economic activity has been rising at a strong pace. However, Americans feel much better about their current situation than they do about the future. A measurement of consumer expectations by the University of Michigan versus the current conditions puts American forward-looking sentiment at a level not seen since late 2001. And cheaper, less comprehensive health plans could be more common after the Trump administration announced it as loosening restrictions on a type of coverage known as short-term medical insurance. Those are low-cost plans that cover a limited period with less expansive benefit offerings and which are subject to fewer consumer protection regulations.
Such plans can now only be carried for up to 90 days.
What do the latest job and hiring numbers from ADP reveal about the U.S. labor market?
The new rule would allow the plans to last for a year and renewed for a total coverage period of 36 months. The plans also don't have to cover people with pre-existing conditions, and insurers can charge higher premiums based on a consumer's health status. They also don't have to include the specific benefits mandated by the Affordable Care Act, such as prescription drug coverage. This is your Money Briefing from The Wall Street Journal. Welcome back, everybody. The Wall Street Journal analyzed more than 1,100 companies, both large and small, to find out how they pay employees. Wall Street Journal reporter Tao Francis headed up the analysis, and he joins us to explain how more than just company size plays a role.
So, Tao, one of the things to come out of the analysis in your piece is that if you're looking for high salaries, a good place to start looking is public companies.
Certainly, this analysis really only looked at public companies because those are the companies that are required now to disclose the pay of the median employee. That is the employee smack in the middle of the distribution from the highest paid to lowest paid. So this is explicitly looking at public companies, but not just the biggest public companies. We looked at about 1100, as you said, and that includes some that are pretty small and that most people probably wouldn't have heard of.
And among those public companies, it really doesn't matter if the company is a household name or not to find higher salaries.
That's right. And that's maybe not too surprising. Companies compete with one another for talent and for skilled labor. And a well-known home builder or a well-known biotech company is competing with lesser companies as well. So you see really a range of pay across well-known and lesser-known names.
And if you're looking for median pay, sometimes it can be driven down if the company employs a range of salaries.
Yeah, that's right. I mean, it's not so much the range of salaries, but where most people are. If you have a really even distribution between a very low minimum wage kind of number and a very high number, then your midpoint will be somewhere in the middle. But if you have a whole lot of low-paid employees, as many restaurant and hospitality companies do, then you're more likely to have a much lower median pay number.
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