Wages, Compensation In MA Slowed In 2023, New Labor Stats Show

BOSTON, MA — Compensation for workers in the Boston-Worcester-Providence area slowed noticeably in 2023, down two percentage points compared to the end 0f 2022, new Bureau of Labor Statistics data show.

Compensation costs increased 3.1 percent for private-industry workers over the 12 months ending in December, according to BLS. By comparison, compensation costs ended 2022 at 5.5 percent. Wages and salaries excluding benefits also dropped: growth was 3.4 percent at the end of 2023 compared to 5.8 percent at the end of 2022.

The region's compensation growth was also lower than the national average of 4.1 percent in December. Compensation also rose at the lowest rate dating back to 2019 — and even lower than the peak pandemic year of 2020 when wages grew by 3.3 percent that December.

Workers were also still being squeezed by inflation in 2023, although lower than past years. Consumer prices in the Northeast grew 2.6 percent between December 2022 and December 2023. Over the previous year, consumer prices rose 6.1 percent.

The U.S. began to see rising inflation in 2021 as manufacturers and retailers began increasing prices for consumer goods, frequently blaming rising compensation costs. The Federal Reserve responded by increasing interest rates in an effort to reduce consumer and business spending and borrowing to reduce prices. The Federal Reserve Board did not reduce interest rates at its last meeting on Jan. 31.

The BLS statistics for the Boston area include a wide area that encompasses all Massachusetts counties from Worcester County east (except Dukes and Nantucket); Bristol, Kent, Newport, Providence and Washington counties in Rhode Island; Belknap, Hillsborough, Merrimack, Rockingham and Strafford counties in New Hampshire; and Windham County in Connecticut.