Hiring signs are everywhere, as job openings fall from record peak but still remain very high, according to the U.S. Labor Department.
In March, employers advertised 11.9 million job openings, the highest level in over twenty years. For every unemployed person, that meant there were two job openings. Before the pandemic, that was far from the case.
In April, those numbers fell slightly, to just 11.4 million openings. And largely not the same openings. 4.4 million people quit their jobs in April, almost all of them to jump to another job for better pay.
According to the Atlanta Fed’s Wage Growth Tracker, people who remained in a job saw an average wage increase of between 3.1 and 4.0% in 2021 and the first quarter of 2022. People who switched jobs, on the other had, saw an increase between 4.8 and 5.6%. Seeing as we’re seeing inflation rise by over 5 percent a year, that difference is huge. Employee loyalty is being actively punished by wage stagnation during this period of high inflation.
The unemployment rate, which doesn’t track all unemployed people, only those currently using some form of unemployment benefit or aid, is down to 3.5%, where it was before the pandemic. The hiring signs aren’t staying up because there aren’t workers. Either they’re unfilled because they’ve failed to retain workers while other businesses offered better incentives, or because they’ve recently expanded. In May, employers added an estimated 300,000 new jobs, despite the staffing problems.
Economists, including the Chair of the Federal Reserve Jerome Powell, want to slow down wage increases as a tactic to fight the heavy inflation, instead of regulating the industries driving it, such as fuel oil and health care suppliers.
“Employers’ focus is on expansion despite high inflation and pending higher interest rates,” said Robert Frick, an economist at the Navy Federal Credit Union. The business mindset that only expansion is success is what is driving inflation, not workers wanting to be paid a decent living.