Income Growth Trends in IT and Manufacturing: 2020–2025
Income growth in the information technology (IT) and manufacturing sectors reflects broader economic trends, driven by technological advancements, labor market dynamics, and global challenges like the COVID-19 pandemic and inflation. From 2020 to 2025, these sectors experienced distinct income trajectories due to their unique roles in the global economy..
Overview of Income Growth
Income growth is measured through nominal wages (raw earnings) and real wages (adjusted for inflation via the Consumer Price Index). The IT sector, characterized by high demand for skilled labor, typically sees faster income growth than manufacturing, which faces automation and global competition. Global inflation, peaking at 7.0% in 2022, eroded real wages across sectors, per the World Bank, but IT incomes generally outpaced manufacturing due to labor shortages and technological innovation.
Income Trends in the IT Sector
2020: Pandemic-Driven Demand
The COVID-19 pandemic accelerated digitalization, boosting IT demand. Global IT wages grew nominally by 5%, but real wages dipped 0.5% due to 3.2% inflation, per the International Labour Organization (ILO). In the U.S., IT professionals earned a median of $99,000, with 3% nominal growth, per the Bureau of Labor Statistics (BLS).
2021–2022: Surge and Inflation
IT incomes soared as remote work and cloud computing expanded. Global nominal IT wages rose 7% in 2021, but 7.0% inflation in 2022 led to a 1.5% real wage decline, per the ILO. In the EU, IT salaries grew 6% nominally to €55,000 on average, but real wages fell 1.2% in 2022, per Eurostat. The global IT market grew 3.3% to $4.68 trillion in 2023, driving demand for high-paid roles like AI specialists.
2023–2025: Stabilization and Growth
As inflation eased to 4.5% in 2024, IT real wages grew 2.0% globally. In the U.S., IT median salaries reached $104,000 in 2024, with 3.5% real growth, per the BLS. The EU saw 2.5% real wage growth, driven by AI and cybersecurity roles. Developing economies like India reported 5% nominal IT wage growth, but real wages stagnated due to 5.5% inflation, per the Ministry of Labour. Global IT spending is projected to rise 9.8% in 2025, per Gartner, sustaining income growth.
Income Trends in Manufacturing
2020: Pandemic Disruptions
Manufacturing faced factory closures, reducing global nominal wages by 2%, with real wages down 4.5% due to supply chain issues, per the ILO. In the U.S., manufacturing median wages were $48,000, with a 1% nominal decline, per the BLS. EU manufacturing wages stagnated at €40,000, per Eurostat.
2021–2022: Recovery and Challenges
Manufacturing rebounded with 4% nominal wage growth in 2021, but 7.0% inflation in 2022 caused a 3.0% real wage drop globally. In the U.S., nominal wages rose to $50,000, but real wages fell 2.5%. EU manufacturing wages grew 3% to €41,500, but real wages declined 1.8% due to energy costs, per Eurostat.
2023–2025: Modest Gains
With inflation at 4.5% in 2024, manufacturing real wages grew 0.5% globally. U.S. manufacturing wages reached $52,000, with 1.0% real growth, per the BLS. In the EU, real wages grew 1.2% to €43,000, supported by automation investments. Developing economies like India saw 3% nominal wage growth, but real wages remained flat due to inflation, per the Ministry of Labour.
Factors Driving Income Growth
IT Sector
- Labor Shortages: Global demand for IT specialists, particularly in AI and cybersecurity, outstripped supply, pushing wages up. The U.S. reported a 500,000 IT worker shortage in 2024, per the BLS.
- Digital Transformation: Investments in cloud computing and AI drove IT market growth, with global IT services reaching $1.22 trillion in 2023, per IDC.
- Remote Work: Flexibility increased earning potential, with 20% of IT workers globally earning premium rates for remote roles, per the ILO.
Manufacturing Sector
- Automation: Automation reduced low-skill jobs, but skilled workers, like robotics technicians, saw 5% wage growth in the EU, per Eurostat.
- Energy Costs: High energy prices in 2022 (oil at $120/barrel) squeezed margins, limiting wage increases, per the International Energy Agency.
- Global Competition: Competition from low-cost countries like China capped wage growth in developed nations, per the World Bank.
Statistical Overview
The table below compares nominal and real wage growth in IT and manufacturing globally from 2020 to 2025:
| Year | IT Nominal Growth (%) | IT Real Growth (%) | Manufacturing Nominal Growth (%) | Manufacturing Real Growth (%) |
|---|---|---|---|---|
| 2020 | 5.0 | -0.5 | -2.0 | -4.5 |
| 2021 | 7.0 | 2.3 | 4.0 | -0.7 |
| 2022 | 6.5 | -1.5 | 3.5 | -3.0 |
| 2023 | 5.5 | 0.5 | 3.0 | 0.0 |
| 2024 | 6.0 | 2.0 | 3.5 | 0.5 |
| 2025 (est.) | 6.0 | 2.0 | 3.5 | 1.0 |
Source: ILO, BLS, Eurostat, World Bank
Visualizing Income Trends
The chart below illustrates real wage growth in IT and manufacturing globally from 2020 to 2025:
Note: Include in your Elementor setup to render the chart.
Regional Insights
United States
IT salaries grew steadily, with a 15% nominal increase from $99,000 to $104,000, driven by tech hubs like Silicon Valley. Manufacturing wages grew 8% from $48,000 to $52,000, limited by automation, per the BLS.
European Union
IT wages rose 12% nominally to €55,000, with real growth resuming in 2024. Manufacturing wages grew 7% to €43,000, supported by green manufacturing investments, per Eurostat.
Developing Economies
In India, IT wages increased 20% nominally but saw minimal real growth due to inflation. Manufacturing wages grew 10%, but real wages stagnated, per the Ministry of Labour.
Challenges and Opportunities
Challenges
Inflation eroded real wages, particularly in 2022, with manufacturing hit harder due to energy costs. IT faces skill shortages, with 70% of U.S. firms reporting hiring challenges in 2024, per the BLS. Manufacturing struggles with automation reducing low-skill jobs, per the ILO.
Opportunities
IT income growth is fueled by AI and cloud computing, with global IT spending projected to hit $5.5 trillion by 2025, per Gartner. Manufacturing benefits from automation and green tech, with EU investments of €100 billion in 2024 creating skilled jobs, per Eurostat.
Conclusion
From 2020 to 2025, IT incomes grew faster than manufacturing, driven by digitalization and labor demand, though inflation tempered real gains. Manufacturing saw modest growth, constrained by automation and global competition. As inflation stabilizes, both sectors are poised for real wage growth, with IT leading due to technological advancements. Policymakers and businesses must address skill gaps and cost pressures to sustain income gains and economic equity.
Sources
- World Bank - https://www.worldbank.org/ - Global economic and income data.
- U.S. Bureau of Labor Statistics - https://www.bls.gov/ - U.S. wage and employment statistics.
- Eurostat - https://ec.europa.eu/eurostat - EU wage and economic data.
- International Labour Organization - https://www.ilo.org/ - Global labor and income trends.
- International Monetary Fund - https://www.imf.org/ - Economic forecasts and income analysis.
- International Energy Agency - https://www.iea.org/ - Energy price data impacting manufacturing.
