Power to the Employer? – The Trend in Wages
The pandemic has instilled a new normal in the world, with things like working from home becoming a common occurrence. Additionally, salaries and wages have continued to increase since the pandemic, but make no mistake, this is not part of the list of new norms.
During the recovery years, companies had to compete to fill their large labor needs after the pandemic led to mass layoffs across most industries. To attract employees, salaries and wages were raised, and this worked as unemployment reached a multi-year low. These days, wage growth has been declining since last summer, sitting at 5.7 percent, and new hires have been affected the most.
According to ZipRecuiter, from the 20,000 job titles currently on the site, most of them have seen the average pay decrease from last year. In another survey from July from ZipRecuiter, almost half of the employers on the website said that they reduced pay for new job openings. The reasoning is rather simple: the Federal Reserve has been looking at the job market to cool while they have been increasing interest rates, and that has been occurring as the labor market has been slowing down as of late. Additionally, in industries like tech, mass layoffs have contributed to decreasing salaries because companies aren’t being pressured to make large offers to possible employees. Now that supply and demand have been balanced, salaries and wages are now adjusting, especially for these new recruits. A natural economic trend, it’ll be interesting to see how this could impact figures like consumer spending moving forward, especially since inflation is still being fought.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.