Here’s one more reason to cling to a steady job: It pays to stay.
Typically workers who snag a new position see higher pay bumps than those holding down the same job. But in February, median wage growth of 4.4% for job stayers surpassed a 4.2% gain for job switchers, according to data from the Federal Reserve Bank of Atlanta.
The change, as measured by a three-month moving average, is yet another sign of a softening labor market. For the past year, employers have been slashing jobs over concerns about inflation, slowing economic growth and interest rates. Layoffs at major tech and financial firms have left many white collar workers clinging to their jobs. And now an oversupply of job seekers means workers are having to settle for smaller pay bumps, said Peter Cappelli, a professor of management at The Wharton School of the University of Pennsylvania.
“That certainly sounds like a big slackening of the job market,” Cappelli said.
It’s a major reversal from the “Great Resignation” a few years ago, when workers left their jobs at unprecedented rates, demanding more benefits and higher pay from employers. At a peak in July 2022, workers who got new jobs saw their wages grow by a whopping 8.5% compared to 5.9% for those who stayed loyal to their company, Atlanta Fed data show.
But, since then, the gap has narrowed with job stayers first seeing higher wage growth in August, which hadn’t happened since 2018. And now the share of US workers transitioning from one employer to another is at a near four-year low, data from the Federal Reserve Bank of Philadelphia show. To be sure, some economic indicators reflect resilience in the labor market, including the number of job openings, a healthy pace of job growth and low unemployment.
Still, President Donald Trump’s trade policies and job cuts at federal agencies have contributed to recession fears and volatility in the stock market. Job stayers historically see higher wage growth than job switchers in the aftermath of recessionary periods. This includes the years after the 2001 dot-com recession and in the wake of the 2008 financial crisis.
