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New government jobs data shows US labor market remains strong, with record levels low unemployment rate 3.5%.
“The lowest unemployment rate in 50 years,” President Joe Biden said on friday. “We just ended two years of the strongest job growth in history.”
However, as the Federal Reserve looks to rein in inflation, there is a risk that the job market could shrink in 2023. The question is whether that will lead to a “soft landing” or not. full-blown recession.
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Andy Challenger, senior vice president of outsourcing company Challenger, Gray & Christmas, said: “A perfect, beautiful landing will still mean more layoffs and a weak labor market. much more”.
For workers looking for work today, he said, there’s a lot of urgency.
“Today is better than six months later,” Challenger said. “So I’ll try to make your moves as soon as possible.”
People who switch jobs are more likely to get a raise than inflation
Daniel Zhao, lead economist at Glassdoor, cited data from the Atlanta Federal Reserve, saying that the latest data shows that jobseekers have increased wages by 7.7% through November, while those who move employees who stayed and worked increased by 5.5%.
However, workers may not see salary increase Quite large, he noted, given the data looking back over the past year.
Higher wages are needed to keep up with inflation. The consumer price index, a measure of a broad basket of goods and services, rose 7.1% in November Compared with the last year.
Wage growth, based on average hourly earnings, is up 4.6% from a year ago.
“Those who move are more likely to get a pay rise above inflation than those who are staying in their jobs,” says Zhao.
According to Curt Long, chief economist and vice president of research at the National Association of Federal Insured Credit Unions, one thing to keep in mind is that real wage growth is likely to outpace inflation in 2020. 2023, if the current trend is maintained.
But with a possible economic downturn, workers who want better pay face a more complicated decision than to stay or go.
‘The best way to know your worth is to get an outside offer’
Julia Pollak, chief economist at ZipRecruiter, notes: “The gap between job transfer and retainer wage growth is the highest on record, at 2.2 percentage points versus 0.7 percentage points. hundred in history.
“There is a big incentive for workers to switch jobs,” Pollak said.
New Payment Transparency LawWhere employers disclose the salaries they are willing to offer new employees for advertised positions, she says, can also be helpful.
Those laws are currently in effect in Colorado, California, Washington, and New York City. In September, the state of New York will follow suit.
She notes that people who don’t live in those areas can still find payment information on sites like ZipRecruiter, Glassdoor, and others.
According to Pollak, with today’s very competitive salaries, even some laid-off workers find offers higher than they previously earned.
“The best way to know your worth is to get an outside offer, which makes things real,” says Pollak.
Looking for a suitable salary in your current role
Pollak notes that workers who see new hires getting paid more may want to reach out to their current employer.
Tell them you love your job, have learned a lot and are committed to the company, but you also know your earnings will be higher elsewhere. “If you can fit that, I’d be more than happy to stay,” suggests Pollak.
Employers may have more reasons to pay to retain talent. One record 4.5 million workers absenteeism in November, an increase of 8.9% over the previous month.
“We are still seeing a lot of work being shuffled,” Long said. “People are leaving their current jobs for new jobs, at a higher rate than before the pandemic, but lower than in early 2022.”
According to Challenger, usually to have a valid claim to get paid more, you have to put in your best efforts and win job interviews and get job offers.
“That’s how you go out and verify your worth in the market,” says Challenger.
If you go that route, you have to be prepared for the fact that your current employer may not be a good fit for the offer.
“You have to be ready to move,” says Challenger.
Changing jobs before recession is ‘balance of risks’
Admittedly, the decision whether to make a major career right before a recession “is always a trade-off of risks,” says Challenger.
If a company decides to pursue layoffs, they may follow a “last in, first out” policy that causes the most recent hires to miss out. “It’s not without risk to switch jobs during a down market,” says Challenger.
“But right now you have more leverage than you will have six months from now,” he said.
Zhao noted that while the job market is still healthy, it is not as hot as it was six or 12 months ago. By 2023, he said, that could lead to slower hiring and subdued pay-rise plans.
If you never take any risks, it will be very difficult to get a raise or get the job you desire.
Daniel Trieu
leading economist at Glassdoor
Before making a move, you should consider whether there are aspects of your job that could make up for not getting a raise exactly as you would like. For example, if you can negotiate to work from home an extra day per week, that could save money on gas or other transportation costs, Zhao said.
Also, consider other compensation in the form of benefits and the value of your happiness in your current position. “Basic salary isn’t everything,” Zhao said.
After evaluating your options, the best approach is to take “controlled risk,” he says.
“If you never take any risks, it will be very difficult to get a raise or get the job that suits you,” says Zhao.
