San Antonio’s biggest marketing firm is giving all of its employees an unconditional, $6,500 pay bump starting on the first of the new year.
The increase is intended to “reward and retain” employees, said Fran Yanity, COO and president of the PM Group and its sister company, Noisy Trumpet. “We want to take care of the people that have taken care of us.”
The increase — technically a new annual bonus spread across the year — is the equivalent of an 8-10% raise for most of the 45 employees across the two companies, a spokesperson estimated.
Though higher than average, the increases are far from unique in San Antonio.
A tight labor market has propelled wages upward across many industry sectors and up and down company ladders. But the worst inflation in decades races shortly behind, threatening to make any pay bump a fading boost.
Wages as a whole rose 3.1% in the last year in Texas’ census division, a category that includes Arkansas, Louisiana and Oklahoma, according to November figures from the Federal Bank of Atlanta.
USAA, one of San Antonio’s largest employers, recently raised its minimum wage to $21. Frost Bank on Friday similarly announced it was raising its starting pay to $20 an hour.
Increases are reported to be happening fastest among low-paying jobs. In San Antonio, wages grew an estimated 10% in the last two years among laborers in manufacturing, but only 3% among truck drivers, according to a recent jobs report from Greater:SATX that covered the first eight months of 2021.
The report, which only made estimates for select industries, also pointed to increases since 2019 for professionals. Physicians saw an estimated pay bump of 12%, and IT managers saw an increase of 5%.
Underlying the raises is a tight labor market. Unemployment in the San Antonio metropolitan area fell for the fifth month in a row in November, to 4.1%, according to the Texas Workforce Commission. Help wanted signs are still seen in the windows of many retail shops and restaurants.
“For the first time in a while, workers have some leverage,” said Prof. Thomas Tunstall, director of research at the University of Texas at San Antonio’s Institute for Economic Development. One contributing factor early on was federal relief aid, which he said bolstered savings and gave workers breathing room to be more picky about jobs.
But the shift toward higher pay was a long time coming, Tunstall said. Gains in productivity began to diverge from workers wages in the 1970’s, while previously the two were largely correlated. “If the minimum wage had kept up with productivity since the 1970’s, it would be over $20,” he said. (Slightly less than 3% of workers in Texas are paid at or below minimum wage, though studies show it has a ripple effect on payscales).
Roughly 900,000 workers in Texas quit their jobs in October, according to preliminary figures from the Department of Labor. September’s quit rate of 3% was the highest in at least ten years — while layoffs are also at their lowest rate.
The labor pool has also shrunk because some workers have retired early, while others — particularly women — were forced out of the workforce to care for children during the early months of the pandemic. Some of those women have yet to return.
Further tightening the labor market, many local firms are flush with cash and eager to expand. The number of jobs in San Antonio’s metropolitan area grew by more than 49,000 since October 2020, according to the Texas Workforce Commission.
The PM Group, whose clients include personal injury lawyer Thomas J. Henry, had record-breaking revenue in 2020 and again in 2021, its president Yanity said. The company and its sister venture Noisy Trumpet said they were worth $50 million in a recent press release, and expect to be worth $62 million by 2023.
But inflation looms over company profits and worker raises alike. The PM Group said insurance rates rose 9% for its employees, though it has absorbed the new costs on their behalf thus far.
Inflation is worse in Texas than the national average, as indicated by the Bureau of Labor Statistic’s consumer price index.
The consumer price index climbed 7.4% year-over-year in Texas’ census division. Much of that increase came from gas prices, which have hovered around $3 per gallon in recent months. Nationally the index rose 6.8%.
Tunstall, the economist, said it’s difficult to assess whether these pay bumps and the new leverage they represent marks a temporary adjustment, or the beginning of a sea change that could resemble structural shifts in the 20th century that resulted in the 40 hour workweek and the minimum wage.