WASHINGTON (TND) — As main streets across the country are full of "help wanted" signs, workers have an unusual amount of leverage and new national data indicate they likely will for the foreseeable future.
According to data from the U.S. Bureau of Labor Statistics, there are approximately 5 million more open jobs than there are people looking for work. Because of the imbalance, many are taking the opportunity to switch jobs, often for higher pay and more flexible working conditions. Economists have dubbed the trend the "Great Resignation."
According to a ZipRecruiter survey reported by the Wall Street Journal, about 64% of people who switched jobs in the past six months said their current job pays more than their previous job.
“About one in two of the people who received pay raises when they switched jobs said that they received a pay increase of double digits, so 11% or more. There were even a handful of people who said that they’d doubled their pay." ZipRecruiter chief economist Julia Pollak said.
Pollak described the dynamic as "one that differs substantially from the market that characterized hires made in the 50 years prior," especially as many employers lower education requirements for job candidates.
"The share of jobs that require a college degree fell in half since the pandemic. The share of jobs requiring five or 10 years’ experience fell even more rapidly. Employers are clearly showing that they are open to considering candidates with non-traditional backgrounds and they’re open to investing in employer-provided training," Pollak.
On Monday, a survey released by the National Association of Business Economics found that 70% of respondents said their company raised wages in the first quarter.
"That is the highest share ever recorded and most of them said yes, their companies are passing on those cost increases to customers," Pollak said.
In March, the Consumer Price Index was 8.5%, the highest rise in inflation since 1981. Pollak said she doesn't expect companies to pull back wage increases any time soon as they continue to struggle to find and retain talent.
“For many people, this dynamic is going to last and that’s because the average job lasts four years so people who entered their positions, started their careers further along the latter will manage to hang on to those gains in many cases," Pollak said.