{"id":17388,"date":"2023-06-02T17:27:14","date_gmt":"2023-06-02T21:27:14","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/the-u-s-labor-market-is-strong-job-hopping-for-a-big-bump-in-pay-however-just-got-a-lot-trickier\/"},"modified":"2023-06-02T17:27:15","modified_gmt":"2023-06-02T21:27:15","slug":"the-u-s-labor-market-is-strong-job-hopping-for-a-big-bump-in-pay-however-just-got-a-lot-trickier","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=17388","title":{"rendered":"The U.S. labor market is strong. Job hopping for a big bump in pay, however, just got a lot trickier."},"content":{"rendered":"
\n

You\u2019ve heard of \u201cquiet quitting.\u201d Get ready for the \u201cbig stay.\u201d<\/p>\n

People who want to leave their current job in the hope of getting more money elsewhere are about to get a wake-up call.<\/p>\n

The labor market is still humming, highlighted by the 339,000 jobs that the economy added in May, according to Friday\u2019s jobs report. Forecasters were expecting 190,000 new jobs. <\/p>\n

\n

But even if many employers are still hiring, more data is stacking up to suggest a job switch is becoming less lucrative compared to a year ago. In other words, it can still pay more to land a new job \u2014 but the pay bump is thinning as recession worries keep nagging employers.<\/p>\n

The May jobs report showed softening wage growth as inflation rates keep coming off the boil. Hourly wages climbed to $33.44, marking 4.3% yearly growth. That\u2019s down slightly from the year-over-year growth in April, and sharply off 5.9% at one point last year. <\/p>\n

Wage inflation is also lagging actual inflation. Consumer inflation increased 4.9% in April, although that\u2019s down from a 5% year-on-year increase in March and also down from a 9.1% rate last summer, which was the fastest pace since 1981.<\/p>\n

But separate research gets more specific about the salaries for people considering a move. It can still pay to move. A job switcher\u2019s hourly wages grew by 6.9% year over year in April compared to the 5.7% for those who stayed at their job, according to the Federal Reserve Bank of Atlanta.<\/p>\n

<\/p>\n
\n

\n \u201c<\/span>\u2018This is the second month we\u2019ve seen a full percentage-point decline in pay growth for job changers.\u2019\u201d<\/span>\n <\/p>\n


\n \u2014 ADP chief economist Nela Richardson <\/span>
\n <\/small><\/p><\/div>\n<\/p><\/div>\n

The monetary advantage to switching jobs appears to be lessening. In July 2022, a job switcher\u2019s annualized wage growth was 8.5% compared to the 5.9% for job stayers, Atlanta Fed researchers said.<\/p>\n

The payroll processing giant ADP
\n ADP,
\n +2.22%<\/bg-quote>
\n showed the same trend. Someone who changed jobs had a more than 12% annual increase in pay as of May, down from approximately 16% during the summer of 2022, ADP said. <\/p>\n

Pay growth \u201cis slowing substantially\u201d ADP chief economist Nela Richardson said when ADP released its May jobs data this week. \u201cThis is the second month we\u2019ve seen a full percentage-point decline in pay growth for job changers.\u201d<\/p>\n

Richardson forecasts what he describes as a \u201cbig stay\u201d where workers stick with their current role. <\/p>\n

Job switchers received a median pay increase of 13% as of April, significantly less than the 20% they received \u201cwhen the great resignation was in full swing,\u201d a separate report by Bank of America BAC found.<\/p>\n

So who makes the biggest increase when job hopping? Pay growth is strong for job switchers at the lowest end of the income ladder \u2014 those making under $25,000 a year \u2014 and it\u2019s softest for households making over $100,000 a year, as well as younger workers in better paying jobs.<\/p>\n

To be sure, job seekers \u201cstill have plenty of options and leverage,\u201d said Paul McDonald, senior executive director for Robert Half International
\n RHI,
\n +5.30%<\/bg-quote>.<\/span>\n <\/p>\n

\u201cIf employers are hiring, they need to act fast and salaries and benefit packages need to be competitive,\u201d he said. That includes providing options for flexible work arrangement and remote work, McDonald said.<\/p>\n

Flexible work arrangements are a strong way to pull in new workers and maintain ranks, according to Mercer. One-third of surveyed workers would be willing for less pay in exchange for more job flexibility, according to the human resources consulting firm. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

You\u2019ve heard of \u201cquiet quitting.\u201d Get ready for the \u201cbig stay.\u201d People who want to leave their current job in the hope of getting more money elsewhere are about to get a wake-up call. The labor market is still humming, highlighted by the 339,000 jobs that the economy added in May, according to Friday\u2019s jobs […]<\/p>\n","protected":false},"author":1,"featured_media":17389,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-17388","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nThe U.S. labor market is strong. 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