Wage Growth Normalizes Post-Pandemic, but Childcare Sector Bucks the Trend

The U.S. labor market is experiencing a return of wage growth to pre-pandemic levels, with the childcare sector standing out for its consistent wage increases despite hiring challenges and expiring emergency funding.

U.S. wage growth has returned to its pre-pandemic rate of 3.1% as of March 2024, according to the Indeed Hiring Lab’s April 2024 Labor Market Update.

However, Indeed’s data reveals that the increase in wage growth has been uneven across sectors — with some industries experiencing a more dramatic increase than others.

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According to the report, the top 5 sectors with the highest posted year-over-year wage growth were:

Legal – 5.7%
Dental – 4.8%
Childcare – 4.8%
Cleaning & Sanitation – 3.9%
Medical Information – 3.9%

Despite ranking among the top five sectors for average annual wage increases, childcare centers face significant hiring challenges — with job postings up 45% from pre-pandemic levels. According to Indeed’s report, this comes at a time when demand for workers remains high overall, with total job postings up 17.5% from pre-pandemic levels as of April 5, 2024.

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The expiration of pandemic-era emergency funding has raised concerns among childcare centers about their ability to provide competitive wages. However, the slowdown in wage growth in other sectors with comparable pay, such as food preparation and service, could still lead to an influx of workers filling vacant positions in the childcare industry. This shift could help meet the still-high demand for childcare services and build resilience in the sector as it navigates the uncertainty surrounding the loss of key federal funding.

As the labor market continues to adjust economic factors in 2024, the childcare sector’s ability to attract and retain workers will be vital to support working families and enable more people