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Workers Who Stay See Big Pay Raises

Employees who stay at their jobs are getting some of the biggest pay increases in 25 years, according to The Wall Street Journal (subscription).

What’s going on: “Wages for workers who stayed at their jobs were up 5.5% in November from a year earlier, averaged over 12 months, according to the Federal Reserve Bank of Atlanta. That was up from 3.7% annual growth in January 2022 and the highest increase in 25 years of record-keeping.”

Job switching pays: Workers who changed employers, particularly in hospitality and leisure, saw even bigger gains of 7.7% in November 2022 from a year earlier.

Why it’s important: Fast wage growth is contributing to inflation, as some businesses are passing along these increased labor costs to consumers.

  • Prices rose at their fastest pace in four decades in 2022, and while inflation has begun to slow in recent months, it remains elevated.

Not feeling it: But not all employees are seeing the benefit of these pay increases. “Wages for all private-sector workers declined by 1.9% over the 12 months that ended in November, after accounting for annual inflation of 7.1%, according to the Labor Department.”

  • In addition, “[t]here are signs wage gains are beginning to ease as the tight labor market loosens a bit. Average hourly earnings were up 5.1% in November from a year earlier, slowing from a recent peak of 5.6% in March.”
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