U.S. Labor Market Trends: Rising Wage Floors & Changing Retirement Expectations
Hey there, readers! I recently stumbled upon this intriguing piece from Alex Tanzi and Bloomberg about the changing wage landscape in the U.S. The numbers and trends shared truly caught my eye, and I thought I'd give you a quick summary. Let's dive in!
The New American Wage Floor According to a survey from the Federal Reserve Bank of New York, the wage floor for American workers - basically the minimum annual pay they’d accept for a new job - hit an astounding close to $79,000. This is a significant leap from the previous figures, which stood at roughly $72,900 a year earlier and $69,000 in 2021.
Gender Dynamics in Pay Expectations An interesting revelation is that women's pay expectations are on a rapid ascent, increasing at a rate twice as fast as men’s. But, let's not get ahead of ourselves. Despite this acceleration, there’s still a substantial gender wage gap. Men, on average, expect a wage of around $91,000 while women's expectations are about $25,000 less.
Education and Wage Expectations For those flaunting a college degree, they're aiming for nearly six figures now—around $98,600 annually for a new job. In contrast, those without a degree have an expectation set around $63,300.
Comparative Statistics For a bit of perspective, the median US household income was $70,784 in 2021. (Stay tuned for the 2022 data releasing next month!)
The State of the Labor Market The good news? U.S employers added 187,000 jobs last month, maintaining an unemployment rate of a mere 3.5%, near the lowest in decades. Moreover, the average hourly earnings witnessed a growth of 4.4% in June from the previous year. But it's not all sunshine. There's a hint that the labor market might be cooling down, with decreasing chances of workers receiving multiple job offers in upcoming months.
Is Earlier Retirement on the Horizon? A tidbit from the Fed survey that might raise some employer eyebrows: more U.S. workers are contemplating earlier retirements. The pool of available labor might be on the decline, with the percentage of individuals expecting to work past age 62 dropping to 47.7% from 48.8% in July 2022.
Post-COVID Reflections Post-COVID, those with household incomes below $60,000 had peaked their wage expectations at about $50,800. Interestingly, this has dipped by more than $3,000 since, while higher earners have continued to elevate their expectations.
In closing, these shifts in the labor market, influenced by various factors including the pandemic, are both fascinating and crucial to watch. It's a sign of changing times, evolving mindsets, and the reshaping of our work culture