Employers Are Cutting Down Salary Offers, Despite Cooling Inflation
While Americans are expecting no less than $70K when starting a new position, some employers are reducing pay. Are companies acting in response to inflation reaching its lowest point since early 2021?
Data results from a ZipRecruiter survey revealed some notable findings after analyzing “year-over-year changes in pay posted for more than 20,000 online job ads,” Fortune reported. Although this year has witnessed a graceful return to more normal turnover patterns, according to a recent JOLTS report from the U.S. Bureau of Labor Statistics, the average posted wage and salary for certain job postings have declined. Last year, in comparison, showed enduring strength of the labor market. Approximately 75% of job posts offered higher pay.
As of July, survey results found that 48% of companies reported they had reduced pay for certain roles this year. Data indicated that the real wage growth returned to its pre-pandemic pace of about 1.7%. Over the years, particularly following the pandemic, many low-income workers received historic wage increases. But it still remained a challenge to offset skyrocketing inflation. Now that monthly inflation is slowing down from 0.2% or lower for three consecutive months, inflation-adjusted earnings are finally growing again.
“Job openings experienced a large drop in July to 8.8 million, just 26% above their pre-pandemic level, and the quits rate fell all the way back to its pre-pandemic rate of 2.3%,” ZipRecruiter found after reporting on a JOLTS report.
“Both declines point to cooling labor market conditions, which will come as a relief to many employers, but bring back many of the old challenges that have characterized job search for decades.”
Among the list of industries that experienced a drop in advertised pay includes technology, travel, and transportation. For example, CDL truck drivers are down 47.1% year-over-year compared to Class A truck drivers whose pay rate decreased by 32.9%, per the ZipRecruiter data.
These declines illustrate just how much the labor market has returned to normal. And job seeker and employee bargaining power is still 29% higher, with close to 3 million more job openings than unemployed job seekers.