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.”