US workers more glum on compensation and work prospects, New York Fed says
2024.08.19 11:26
By Michael S. Derby
NEW YORK (Reuters) – U.S. workers are growing more sour with their employment compensation, according to a survey released on Monday by the New York Federal Reserve.
In its Survey of Consumer Expectations Labor Market Survey for July, the regional Fed bank said that as of last month, “satisfaction with wage compensation as well as with non-wage benefits and promotion opportunities at respondents’ current jobs all deteriorated.”
As of July, 56.7% of respondents said they were satisfied with their pay compared to 59.9% who held the similar view in July 2023. Benefits satisfaction dropped to 56.3% from 64.9% over the same time period, while satisfaction over future career path improvement ebbed to 44.2% of those polled, from 53.5% in July 2023.
The survey noted that the declines in satisfaction were concentrated among women, those without college degrees and those who earned under $60,000 per year.
The survey found a small increase in those who plan to move to new jobs, with 11.6% of respondents saying in January they planned to find a new employer, versus 10.6% who felt likewise in July 2023.
A series high 4.4% of respondents said they expected to lose their job, versus 3.9% in the survey a year ago, even as a rising number of respondents expecting to get at least one job offer in the next four months rose.
The report also weighed in on the state of workers’ so-called reservation wage, which is what prospective new hires say they would need to consider taking a job. That wage has been increasing by leaps and bounds in recent years, amid tight labor markets and high levels of inflation.
The reservation wage was $81,147 in July, down slightly from the record prior quarter reading of $81,822 but up considerably from the $78,645 reported in July 2023. In contrast to what workers say they need to take a job, expected salary offers for a new job fell to $65,272 in July from $67,416 a year ago.
The New York Fed said in a separate blog posting the jump in the reservation wage over recent years appears large but is more modest when the inflation surge is factored in. While the wage has risen 31.4% between March 2020 and July of this year, it’s up 8.2% when adjusted for inflation, after falling in real terms in the four years leading up to the COVID-19 pandemic.
“This shows that even though part of the increase in respondents’ reservation wages is due to inflation, there has still been a rise in the minimum compensation respondents require to accept new job offers in real terms,” New York Fed economists wrote. They also noted that in real terms the reservation wage has settled down and been essentially flat since early 2021.
Workers’ rising discontent over their compensation and job opportunities coincides with falling inflation pressures and a rising unemployment rate.
