“The demand for workers is still white-hot,” said Julia Pollak, chief economist at ZipRecruiter. “This is a very broad, enormous growth. Although we have regained almost all the jobs lost in the pandemic, the labor market is only getting tighter and tighter. “
The strong data on vacancies and redundancies could play a role in discussions about curbing inflation at the Federal Reserve, which is expected to announce a new interest rate increase by half a percentage point on Wednesday. Fed Chairman Jerome H. Powell has cited the “extremely, historically” tight labor market as a major reason why he says the economy can withstand higher interest rates without falling into recession.
U.S. employers have added more than 400,000 jobs a month for nearly a year, while 3.6 percent unemployment is still near record lows. In total, the number of vacancies increased by 36 per cent in March from the previous year. Demand for workers increased markedly in retail (where vacancies increased by 155,000 from February), industry (up 75,000) and finance and insurance (up 51,000).
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The insatiable need for new employees has forced employers across the economy to offer higher wages and better benefits. Wages have risen by 4.7 per cent in the last year, although they have not kept pace with inflation, which has grown by 8.5 per cent in the same period. Economists say they expect workers’ wages to continue to pick up in the coming months as companies compete for a limited group of workers.
“These record highs across the economy show that employers are under a lot of pressure,” Pollak said. “They will realize very quickly that offering massive compensation packages to new employees is not going to cut it anymore. They will have to raise the wholesale salary for existing employees as well.”
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Workers who changed jobs saw a 5.3 percent increase in median wages from a year ago, compared with 4 percent growth for those who remained, according to the Federal Reserve Bank of Atlanta’s Wage Growth Tracker.
“The balance of power in wage negotiations has tipped towards workers,” Mickey Levy, America’s chief economist for Berenberg Capital Markets, wrote in a customer note on Tuesday.
Grace Oppy, 26, quit her job at an art gallery in New York in March. Less than a month later, she had found a better paid position as an assistant in a large finance company.
“There were a million openings, which were so different from earlier in the pandemic when it was impossible to get a job,” said Oppy, who has been unemployed for much of the last two years after losing his marketing job in Paris in early 2020. ” “Now you can get a job. Can you afford to live? I’m not sure, but you can at least be hired.”
In addition to higher wages, many workers say that the strong labor market has encouraged them to take risks they might not otherwise be willing to consider. Many prioritize more flexible schemes and a balance between work and private life.
In Long Beach, California, Paula Hardy recently left her job as a chiropractor at a women’s clinic to start her own mobile practice. After working six days a week during large parts of the pandemic, she says she felt burnt out and not appreciated.
“I went from making six figures a year to much smaller than that,” said Hardy, 38, who is also taking courses to become an acupuncturist. “But I’d rather do my own thing and eat ramen noodles, even if it’s harder financially.”
This was the second time Hardy changed jobs during the pandemic. The first time, in December 2020, she left a position as a chiropractor for the longshoremen at the Port of Los Angeles after her boss insisted that she continue to come to work even while she was sick with the flu.
“This increase meant nothing”: Inflation is drying up wage increases for most Americans
“I was already disillusioned,” she said. “Then I got sick, and it was clear that they did not care. The pandemic made me realize that I do not have to put up with it. “