The job market is strong and unemployment is at a 50-year low.
But, as we head into the holiday shopping season, American workers’ pay has been stuck at a middling annual growth rate of about 3% (average hourly earnings grew 3.1% y/y in November, according to the Bureau of Labor Statistics monthly jobs report).
And according to a new survey from Bankrate, a lot of Americans aren’t seeing any pay hike at all this year. Bankrate surveyed 1,000 people across the country and found “about half of working Americans got a pay increase this year, and about half did not,” said chief financial analyst Greg McBride.
This year, 49% of respondents reported an increase in pay. That’s a substantial increase from the 38% who did in 2018.
The Bureau of Labor Statistics tracks wage changes based on the Census Bureau’s Current Population Survey, and according to its data, approximately 13% of Americans received no pay increase this year.
McBride pointed out that the survey methodologies are different and not directly comparable. (Bankrate’s survey methodology can be found at the end of its report. )
McBride speculated that some workers who reported to the Bankrate survey that they had zero wage growth this year might have received more expensive benefits from their employer. So McBride said they wouldn’t see more money in their paycheck, but “they may have gotten a raise in the form of their deduction for medical insurance not going up, whereas the employer absorbed a larger share of that.”
Of those who got a pay hike this year, about 25% achieved that by moving to a better-paying job. Economist Nick Bunker at the Indeed Hiring Lab said that confirms other research findings in the HR field.
“Wage growth for folks who switch jobs is much higher than for workers who stay at their job.” Bunker said the “quit and get a new job” wage-premium has increased, as the labor market has tightened and employers have scrambled to find talent.
Bunker pointed out that the so-called “quits rate” reported monthly by BLS, which measures the percentage of workers who voluntarily leave their jobs, declined sharply during and after the Great Recession, and has now rebounded to pre-recession levels. He expects the quits rate to rise further, as the economy approaches full employment and unemployment remains near historic lows.
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