Switching jobs for a significantly higher salary is so 2022. Welcome to the Great Stay

You may remember that strange phase of the labor market after the pandemic that got dubbed The Great Resignation — when employers were hiring like mad, and lots of workers were leaving for better-paying jobs.

They had good reason. According to data from the payroll company ADP (where occasional Marketplace collaborator Nela Richardson is chief economist) back in the first half of 2022, your annual salary went up 8% more if you left your job than if you stayed. 

Those days are long gone. Now ADP reports that increase has fallen below 2%.

Some are calling this phase of the labor market The Great Stay.

It’s a classic case of supply and demand. The supply of available jobs is lower than it used to be, so employers can pay lower salaries for the open jobs still out there.

“That's what people call the frozen labor market, or The Great Stay. … if you find something, it's not going to pay much more than what you’re currently in and it might even pay less,” said Guy Berger, director of economic research at the Burning Glass Institute.

He said employers aren’t hiring or firing much these days. So if you like your current job?

“You're going to be hogging it, you're going to be holding on for dear life. You're not going to be at very high risk of being laid off. But if you want something else … you’re not going to get much of a pay premium for switching if you manage to find something,” Berger said.

This 2% gap between salary increases for job switchers over job stayers is really not all that uncommon. And overall, wage growth rates are still higher than they were in, say, the early 2010s, said Preston Mui, senior economist of the advocacy think tank Employ America.

“They're pretty comparable to what we saw right before 2020, which is highly regarded as sort of a time of full employment,” he said.

But people right now aren’t exactly comparing this labor market to the one before the pandemic. Economist Felix Aidala with the Indeed Hiring Lab gave two reasons for that:

One? “We're seeing a loss in negotiating power across the board. Like, wage growth has been declining for both groups,” Aidala said.

Both groups, as in, stayers and switchers. The gap is shrinking because of smaller wage gains for the latter. That feels bad.

And number two: “I think it feels worse, because right now, the people who are switching jobs are disproportionately people who would not like to be,” he said.

They’re more likely seeking work after being laid off, and they’re having a harder time landing a job they want.