10.31.14 |
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Garnishment Rates Vary Widely By Geography, Industry

Earlier this week, the ADP Research Institute® revealed findings from a first-of-its-kind study on current trends in U.S. wage garnishments, or debt recovery through pay seizures.  The study found that garnishment rates vary widely among industries and geography, with the highest rates found in the manufacturing sector and the Midwest.  In addition, garnishment rates are up significantly in some cities following the economic downturn.

Overall, the study, and analyzed aggregate, anonymous payroll data from 2013 comprised of 13 million employees age 16 and older, found that 7.2 percent of U.S. workers, or about 9.5 million individuals, have their wages garnished. In addition, roughly 1 million workers have multiple garnishments.  An earlier post already covered the top reasons for garnishments, so this post will take a deeper look at key trends in U.S. garnishment rates.

The study revealed that nearly half (48 percent) of companies in the manufacturing sector have at least one employee whose wages are being garnished.  The transportation and utilities industry has the second-highest garnishment rate at 42 percent.  On the other side of the spectrum, professional and business services, financial activities, and education and health services have the lowest garnishment rates, each at 23 percent.  This disparity suggests a possible relationship between garnishment and blue- and white-collar job categories.

Garnishment by regionThe study also found that garnishment rates vary by region.  The Midwest has the highest number of garnishments, with nearly 9 percent of companies reporting employee wage garnishments, while the Northeast has the lowest rate at 4.9 percent.  The South and West are comparable with 7.9 percent and 7.3 percent, respectively.  One possible reason for this geographic disparity is the variation in industry concentration among these regions.  The South and Midwest have more manufacturing companies than the Northeast and West.

In addition, according to the New York Times, garnishment rates are up significantly in specific areas following the economic downturn.  For example, Phoenix has seen a 121 percent increase in garnishments since 2005.  In addition, garnishment rates have grown by 55 percent in Atlanta since 2004, and Cleveland saw a 30 percent increase between 2008 and 2009 alone.

Check back for the final post in this series, which will examine garnishment rates by age, gender and compensation.  For a free copy of the ADP Research Institute white paper that outlines the study’s key findings, visit Garnishment: The Untold Story.
 

 
 


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