Americans now need more money than ever to accept a job offer.
On average, the lowest salary job seekers in the United States are willing to accept to take a new job is $81,822, according to new data from the Federal Reserve Bank of New York. This so-called “reserve wage” reading is the highest in the survey’s 10-year history.
Last year at this time the figure was just under $76,000, a difference of $6,011. The surge in the reservation wage suggests that, after years of dealing with high inflation, Americans are starting to demand higher starting pay.
Although the reservation wage is at an all-time high for both men and women, the average figures vary widely between them. On average, it takes about $95,500 to convince men to accept a new job, while women say they would accept about $66,300.
Growing pay (and job) dissatisfaction.
Currently, the average full-time worker earns about $84,000, another record high. But this is not enough for a growing share of the workforce.
The percentage of workers who say they are satisfied with their salary fell to 55.6%, down 4 percentage points compared to a year ago. Compared to last year, it is above all women who are less satisfied with their earnings, with a level of satisfaction falling by more than 9 percentage points.
Again, this could be due to persistent inflation. On top of that, the Federal Reserve keeps interest rates high in an attempt to keep prices from rising even higher. This strategy tends to lead to a tamer job market. Simply put, when interest rates are higher, employers have to spend more money on debt payments (and less on wages).
In terms of promotion opportunities, less than half of workers say they are satisfied, women less than men. The lack of advancement is part of what drives many workers to look for work elsewhere.
Big resignation 2.0?
According to separate data from the Atlanta Fed, people who changed jobs in recent years earn more money than those who waited for a raise. In 2022, during the height of the “Great Resignations” – a period marked by millions of job resignations – people who changed jobs earned a nice pay raise.
Since then, the job-switching premium has shrunk, but job-switchers continue to consistently earn more than those who stay.
Now, about two years after the peak of the Great Resignations, data from the New York Fed suggests that worker discontent is growing again, approaching levels seen just before Americans began resigning en masse.
One major difference is that, now, high interest rates keep the job market in check and, as a result, employers may not be as keen to hire. This makes quitting riskier, so even if workers aren’t very happy with their pay, questionable job prospects could stem a potential tide of quitting.
While the job market has indeed bubbled since the pandemic, it remains strong by pre-pandemic standards. However, this economic decline appears to be evident to the average employee: Overall, the New York Fed says workers are now “more pessimistic about losing their job and looking for new work” than in recent years.
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