American workers are demanding almost $80,000 a year to take a new job

A woman waits on customers at the Same Day Cafe in the Logan Square neighborhood on August 18, 2023 in Chicago, Illinois.
Scott Olson | Getty Images

The amount of money most workers want now to accept a job reached a record high this year, a sign that inflation is alive and well at least in the labor market.

According to the latest New York Federal Reserve employment survey released Monday, the average “reservation wage,” or the minimum acceptable salary offer to switch jobs, rose to $78,645 during the second quarter of 2023.

That’s an increase of about 8% from just a year ago and is the highest level ever in a data series that goes back to the beginning of 2014. Over the past three years, which entails the Covid era, the level has risen more than 22%.

The number is significant in that wages increasingly have been recognized as a driving force in inflation. While goods prices have abated since pushing overall inflation to its highest level in more than 40 years in mid-2022, other factors continue to keep it well above the Fed’s targeted rate of 2%.

The New York Fed data is consistent with an Atlanta Fed tracker, which shows wages overall rising at a 6% annual rate but job switchers seeing 7% gains.

Employers have been trying to keep pace with the wage demands, pushing the average full-time offer up to $69,475, a 14% surge in the past year. The actual expected annual salary rose to $67,416, a gain of more than $7,000 from a year ago and also a new high.

Though there was a gap between the wage workers wanted and what was offered, satisfaction with compensation and upward mobility increased across the board.

With markets on edge over what the Fed’s next policy step will be, more signs of a tight labor market raise the likelihood that policymakers will keep interest rates higher for longer. At their July meeting, officials noted that wages “were still rising at rates above levels assessed to be consistent with the sustained achievement” of the 2% inflation goal, minutes from the meeting said.

Monday’s survey results also showed some other mixed patterns in the labor market.

Job seekers, or those who have looked for work in the previous four weeks, declined to 19.4% from 24.7% a year ago. That came as job openings fell by 738,000 to 9.58 million, according to the Bureau of Labor Statistics.

The likelihood of switching jobs fell, dropping to 10.6% from 11% a year ago, while expectations of being offered a new job also declined, to 18.7% from 21.1%.

Articles You May Like

European major indices close higher. Encouraged by the weaker UK inflation data today.
Striking unions impacting the economy at a level not seen in decades
Criminals more reliant on cross-chain bridges than ever after mixer crackdowns
EURUSD cracks below 100 hour MA at 1.06748
Buy now, pay later firm Klarna cuts losses in first half but fails to post profit

Leave a Reply

Your email address will not be published. Required fields are marked *