When employers do offer jobs, it better come with some teeth: Americans’ wage expectations have reached a record high, according to a survey by the Federal Reserve Bank of New York released Monday.
Job seekers’ median reservation wage — the lowest they are willing to take for a new job — rose to $78,645 in July 2023, up nearly 8% from July of last year, according to the New York Fed’s latest survey of consumers. Labor market experiences and expectations.
The high wage expectations are a reflection of the current moment in the economy and labor market, said Julia Pollock, chief economist at online job marketplace ZipRecruiter.
“That explains a lot of what we’re seeing this summer with strikes and unions pushing for higher wages; and, of course, wages follow inflation, and part of the reason workers expect higher wages is that prices have risen 17.5% since the pandemic,” he said.
Without post-pandemic inflation, prices would have increased by only 7%, he said.
Wages have grown in that time, but not to pre-pandemic levels — certainly not against inflation. May was the first month in more than two years that US workers’ real hourly earnings (adjusted for inflation) grew on a year-over-year basis, and June 26 was the first month in which real weekly earnings grew year-over-year.
“Even though they’ve had these big nominal wage increases since the pandemic, many workers feel they’re still not better off because their wages have tracked inflation and not kept up with productivity, and they expect wages to keep up with and complement inflation and productivity,” Pollock said.
Men and college graduates are more in demand
While reservation wages have risen for workers across the board, some groups’ demands are significantly higher than others: for college graduates and men, wage bases are $98,644 and $91,048, respectively.
Reserve wages for women also hit a record, but at $66,068 — $12,500 above average and nearly $25,000 below expectations for men.
“The fact that women earn 84% of what men earn, but expect only 73%, probably speaks to the media narrative. [of the gender pay gap] It makes women expect even less and maybe we’re not adequately preparing young women for the workforce,” Pollock said. “We’re worried about women thinking they’re going to automatically cut back, when maybe that’s not the case.”
Pollock noted Recent Research on “Gate Gap” Shares In Gender Wage Inequality. Using data from Hired.com, economist Nina Roussille, who is an assistant professor of economics at the Massachusetts Institute of Technology, found that women asked an average of 3.3% less than men for full-time engineering jobs, and that gap widened to 6. % of women with more experience. However, when salary transparency was introduced on site and average wages were paid, the gap closed.
“Especially in male-dominated industries, the rate at which women go can be underestimated,” Pollock said.