US salaries are falling. Employers say compensation is just 'resetting'
US salaries are falling. Employers say compensation is just 'resetting'
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.
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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. The effect of oversupply
The tightening labour market has left US workers with fewer options than just years earlier. Beginning 2020, employers boosted salaries to new heights to attract talent to a deluge of open roles. But amid an uncertain economy, employers have pulled back from new hires and cut jobs.
"There is now less competition to hire workers – and therefore less need to boost wages," says Nick Bunker, US-based director of North American Economic Research at Indeed. "Job postings have dropped quite a bit, while the supply of workers has grown."
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.
This is most likely to happen in industries that had the greatest competition for workers during the hiring crisis. For example, Indeed data shows US hospitality and retail jobs experienced 11.8% wage growth year-over-year in February 2022 – falling nearly four-fold 3.4% by January 2024. Companies in other sectors, such as tech, which once experienced a high demand for workers, are now also resetting expectations.
"We saw a massive bull run in the market during the pandemic, where there was a big increase in baseline compensation for workers because of talent shortages," says Chris Rice, of Boston-based US executive tech recruiting firm Riviera Partners. "We're still seeing a market reset that's ongoing. An oversupply means compensation has dropped because the demand is no longer there." 'A whiplash effect'
Ultimately, employers who are filling roles after layoffs or hiring freezes are likely to use the newfound leverage they have, says Till von Wachter, professor of economics at University of California, Los Angeles. "They'll tend to orient their new salaries at the going rate, so starting wages may fall in order to equilibrate the market," he says.
The current phenomenon may be felt most acutely in the US because of how its economy rebounded from the first Covid-19 lockdown in 2020. Indeed data shows its peak wage growth dwarfed that of the UK and Europe. "The US economy jumped out the gates in the wake of stimulus packages and mass vaccinations," says Bunker. "So, wage growth has faded rapidly amid less job market churn and switching."
In many ways, what we're seeing is a correction. Wage growth is reverting to pre-pandemic levels of below 3%, says Bunker. "A 9.3% spike in year-over-year wage growth is anomalous in many ways. It came from the initial shock of Covid-19, and an economy heading towards recession suddenly rapidly expanding, then having to suddenly hit the brakes again. It's a whiplash effect."
At current rates, wage growth may return to pre-Covid levels by May 2024, says Bunker. Whether it rises, plateaus or shrinks from there depends on whether hiring picks up. And if inflation continues to rise, workers will increasingly feel the pinch of these new lower or stagnant salaries, he adds.
While inflation has begun to drop in the US and UK, the cost of living has outstripped salary increases for nearly three years, says Bunker. "Real wages today are still below where they would have been presumed to be, pre-pandemic. So, it's a race between inflation and wages."
Falling wages while inflation keeps chugging along. Companies love it
We got inflation, we got shrinkflation, we got price gouging, we got climate change shutting down the Panama Canal and a genocide shutting down the Suez Canal to our ships indicating another supply shock coming soon. Everything, and I cannot state this desperately enough, is fine.
Every crisis an opportunity for
Most rational, efficient, economic system everyone!
Bidenomics saves the day. Yes food and rent are more expensive, yes wages are down, but
Genuinely at this point it’s like “You know what maybe Trump was better”
I already thought Trump’s incompetence made him better for the rest of the world, but at this point I’m like “At least under Trump the economy wasn’t this fucked”
Yep. Imagine how fucked we be if there was an R in charge though.
corporate wants you to find the difference between these pictures:
Except people are suffering now
They're suffering now and the best you or any other liberal politician can do is go "
The economy is fine Jack"
And for people who love to talk about Orwell, that's a hell of a lot more 1984 then even that old Limey jag-off imagined
There's currently 750 armed national guardsmen conducting mandatory searches of people's belongings in the NYC subway system. This happened under a D governor, under a D president. If this happened in North Korea or China you'd be losing your fucking shit. As long as it isn't an R in charge though....
Why are so many of you fucking bozos back in here? Nobody in here buys the electoral politics schlock, go back to telling each other fanfiction of how perfect everything would be if libs were in charge forever
Fed and companies don't care still gonna drive down labors wages and power
Permanently Deleted
: "Bro, bro BRO! You gotta stop working for the man to make money, bro! You were supposed to invest bro! Just buy a starter house and rent it out, bro! Poverty is a mindset, bro! You can become rich just by deluding yourself into thinking you are, bro! You can also just start your own business bro, MANIFEST that shit, bro!"That's nonsense. You didn't take a 40% cut to your salary.
Your money is also worth less so it's higher than that
Funny how when wages go down its a post-pandemic correction (even though the pandemic isn't over) but when prices stay high its just that the market moves in mysterious ways.
Perfect radicalization tool. If you're poor, you will see an increase in suffering as a result of the economy being good, so "the economy" is irrelevant at best for poor people or our outright enemy.
Yes but see you just don't understand the economy. Let me explain how nobody being able to afford housing or food or transportation or healthcare is actually a good thing.
Cameras cut to the most insufferable rich fuck they can find "because, fuck you, that's why. Now quit watching TV and get back to work, billionaires on yachts depend on your labor!"
A rising tide lifts all yachts after all!
Well, it is a good thing really, if the ultimate goal is going back to slavery. We shouldn't assume worsening economy will lead to some leftist revolution it will just as likely lead to some combination of fascism and 19th century capitalism conditions. If anything the liberals will march right along saying the 2048 election is the most important election of our times because they realy want to bring back slavery so you must vote....
Honestly, I just don't think (or maybe want to doubt) it will get to that. Call me unmaterialist, but I have this hairs-on-the-back-of-my-neck inkling that people in the US are waay closer to another breaking point than we let on. Anecdotally, I went to a Gaza protest last week and out of thousands of people there, I saw no libs and zero
shit. Everyone was a communist, the speakers and organizers were communists, there were communist flags, it's communist time baby
I think it's only fair we also "reset" all the employers' wealth too, then
I prefer the phrase... Induce a state of reincarnation.
Everything under capitalism will continue to increase in price, except for wages, because wages increasing would cause inflation.
So you're saying capitalism is designed to exploit the working class?
No that's a communist conspiracy theory.
: "Stupid lefties, they think everything they dislike should be banned but everything they do like is a human right that should be paid for by others!"Also
: "Having a business is a human right, and that's why we need workers to work for free!"
I did an unsuccessful job search last month and the number of recruiters talking about the company using benchmarks to set salaries was up significantly from my last job search a couple years ago. Like from 0 to every single fucking one.
Smells an awful lot like the way RealPage fucked tenants by helping landlords collude to raise rents.
It is exactly like that. Companies continue to corporatize and consolidate. HR becomes more and more the domain of consultants (read: 🐍). And as wage setting consultancy is itself centralized into a small number of companies, the ability to collude and fix labor market prices becomes a reality. Real Byzantine ancap shit.
Capitalism fails because it goes against business interests to compete, the bourgeoisie have a shit-ton of class solidarity.
Boy are they going to be surprised when their profits start "resetting" because nobody can afford their shit
Capitalists really do perform a great job in showing us why a command economy is more efficient. Because of "muh shareholder value" we're in what is essentially a man-made famine.
Is this even going to happen though? Companies that run into trouble just get bailed out by the federal government, which can print dollars endlessly due to imperialism.
A person I know was one of the overpaid tech workers until he quit his job mid last year, expecting to take a few months off and then jump back in elsewhere for +20% pay. There's a bit of schadenfreude watching him seek work now and not just getting things on a silver platter.
Was he underpaid, or are you just under paid?
Schadenfreude seems misplaced when it's just that one segment of the workforce escaped getting fucked over, and now they've joined the majority in getting fucked over.
He's a reactionary treat baby and a landlord. I hear you and you're right on a systemic level. Nevertheless, I never claimed to be a perfect communist and I hope many many other people get better treatment before this guy does.
I got a 9.5% raise this year (which honestly pissed me off because if you're gonna give someone a 9.5% raise just go for fucking 10%) but lol with inflation it is meaningless. supervisor was like "yayyyyy :)" when they told me only to be shocked when I went
"cool this brings down my rent budget from 80% of my monthly income to ~75%"Idk what to say whenever I get a raise. I'm aware that they're expecting you to say "thanks" or something like that but it feels too much like ass kissing.
Especially when I can plainly see that I've gotten poorer despite the raise due to inflation.
I usually just do an "oh, good". Feels weird to effusively thank them when it's always less than what I deserve and we both know it, it's hard to hold it in.
Imagine being a normal person, sitting and writing this drivel uncritically, seeing what you have made and not minecrafting yourself immediately.
"It's not fair that material conditions made it clear we could pay far better than we were willing to before the pandemic forced our hand. Mods plz
"I recently regained access to Costco after a four year, "I don't have any fucking money," gap. Prices are literally double what they were in 2020.
Anyway, falling wages is good for The Line.
The rare case where youtube comments are mostly good (and taking the dipshits in the video to task).
Sorry but the science of economics has spoken: higher wages is bad and unnatural, lower wages is good and natural.
my savings are like 1/3 of what they were this time last year after a 6 month involuntary "fun"employment gap and medical bills and it barely feels like I can start building anything up again. I got told last week that i'm probably not eligible for a raise this year because i haven't been with the company long enough (because they laid me off for 6 months before i went back for a different position....) i was explicitly rehired over other potential candidates because they would have to pay me less since I don't have a phd
Neolibs: "It's okay that there's tons of inflation because salaries will rise to meet it! It's all part of how the market works!"
The Market:
Anyone get a 10% COLA last year?
Rhetorical of course all of our salaries are falling not just those of new hires
I got a cost-of-living-fuck-you last year
3.5% COLA :D last year because I "hadn't been here a year yet"
My COLA was cut like 20% lower
i live in a weird area that's a combo of low cost of living and has a huge labor shortage but it's only because of very unique circumstances (very rural population that skews very old)
also it's very uneven. we have trouble filling FT positions and starting pay is up to almost $20/hr (grocery retail) but like hours are really unpredictable and keep getting choked off leaving everyone overworked and sub-40hrs a week
grocery also is keeping the gravy train rolling by just continuing to raise prices forever until an armed people's militia starts hijacking our trucks lol what am i saying that will never happen
unless?
Capitalist think they are smart, but at the end of the day, lower wages means disposble income, so less buyers for products or services. Except essentials which they'll keep control, untill we get very angry mobs, and go take it, which will happen.
It's not about being smart/dumb. Capitalists fill the full intelligence range from roughly like an Elon type dipshit to (and fuck them, but they aren't dumb) Zuckerberg or Gates. Guys who aren't all that super technically skilled, but are good at exploiting their given status in life from birth.
This is just the inevitable consequences of capitalism. Regulation can/could hold back the worst aspects, but given time, liberalism will always rot out the social safety nets.
There can legitimately be no such thing as a good capitalist. The term is neutral. Just a descriptor. The same as labor. It describes their class and position in relation to capital and the means of production.
Their position requires that they exploit labor in ever-intensifying ways. Their profits have to go up, the capitalist class demands it, and profits only go up through heavier exploitation. More hours of labor for the same or less pay. Less pay, easily hidden in the veil of inflation at the moment. No further amenities from the public sector as that might reduce the pressure forcing people to work longer or for less pay.
The perfect laborer to a capitalist is one who works 24/7 at a constant, maximized output. They never rest, never eat, never require time for families or anything besides working, perfectly, producing surplus value for the capitalists to suck up. Slavery is ideal for them, of course, but considered a bit gauche now days. But have no doubt they'll keep pushing the labor force further and further in basically a reversal of any sort of progress made since the mid 1800s. Because they have to. The profits must rise.
If we're all super honest, the US workforce can take a lot more punishment. People are just now realizing futures of multiple roommates into their 30s (for lifetime, likely, unless something huge happens). Lives of their entire checks going to capitalists who simply happen to own their building. Food cutting into the budget further and further. People still get by though and, relative to the global south, decently well off.
Considering the absolute lack of any class conscienceness why wouldn't workers just continue to suffer more and more year over year until everyone is in a barracks-style bunker with 50 people per room with bunk beds and mass showers? (You'll still cough up 50% of your paycheck for that, btw). I mean this sincerely. People have zero organization and basically no knowledge of the past. Why not shove the entire laborforce into prisons as long as they have Internet, phones, and some tasty slop nightly, people will allow themselves to be subjected to far worse. Not that you'll have much choice. The rare person who snaps will just be dealt with.
I dunno. I see so little hope not just for America, because who cares about this shitty country specifically, but the world. Not dooming, btw, because I still know it can change, but I also see the current trajectory.
Heads of the ruling class are separating from their bodies, and in some cases, falling. Communists say the guillotine is just "resetting.
Sooo.....when can we see a "reset" on property values? How about tuition, food costs, and healthcare while we're at it?
i want to do a phd, its what i actually love and i'm qualified, but fucking CHRIST it seems like a bad idea to voluntarily take a 50% pay cut right now
My university pays $13-15/hr for grad students. It takes 15% of that back in fees and charges like $600/semester for employee parking anywhere on campus. Fast food restaurants pay $20~ and it isn't enough to survive on here without multiple roommates, with rent set to increase another 30%+ with property tax increases and no increase to wages since 2020.
I'm not going to teach multiple advanced classes with several hundred students while doing research for $15/hr. I'm not commuting 45 minutes by car to be able to do that while affording to live on my own. All of our admins make at least $300k/year with the dean making $500k and football coach making $1.5m/year. My hate is pure.
