COMP NEWS – Salaries for new roles in the US job market are stagnating or even declining as employers tighten their belts in what some call a “post-pandemic correction.”
Salaries for new roles are stagnating – and in some cases, falling. Some employers may be looking to cut costs, but the lack of wage growth may be a matter of post-pandemic correction.
The mass US layoffs of the past few years are continuing. In 2024 alone, thousands of workers across many sectors, including media and technology, have lost their jobs and are on the hunt for new ones. But some are finding an unwelcome surprise as they scan listings for open roles. A salary bump is all but impossible; in many cases, wages seem lower than their previous pay – even for the same jobs.
They aren’t imagining things. A 2023 report on pay trends from ZipRecruiter showed 48% of 2,000 US companies surveyed lowered pay for certain roles.
But, say experts, companies aren’t necessarily just seizing a moment in a tight job market to reduce costs. In some cases, stagnant and even lowered salaries are the result of an overdue reset for a pandemic era surge in compensation when companies were scrambling to fill roles during the Great Resignation.
Amidst a tightening job market, workers have fewer roles to compete for and less room to negotiate from wages, a drastic departure from the early days of the post-pandemic job market.
At its peak in early 2022, US wage growth for advertised roles climbed to 9.3% year-over-year, according to Indeed data. It has fallen precipitously ever since, as demand for workers has slumped. By January 2024, it had plummeted to 3.6%. The downward trend continues, and it’s unclear when it will reach the bottom.
Now, with a decline in open roles, workers have fewer opportunities to get new jobs and secure better compensation. Simply, employees have less leverage to negotiate pay or secure a better starting salary – especially if they’re clawing for any type of employment they can get.
In some cases, says Bunker, a company may not outright drop their compensation for new roles, but in the current environment of inflation, money simply won’t go as far – the same wage as before may feel like a pay cut to workers. But in other cases, a greater supply of workers against weakened demand may mean a similar position from 2022 is now advertised with a lower salary.
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