A reportedly strong labor market does not always translate into higher pay when switching to a different job, according to a report from MarketWatch. Workers who have taken a new position are finding themselves in an uncomfortable situation – having to take less pay than before.
The trend is seeing employers across the U.S. reducing wages for current job openings. It’s having an impact across a range of job titles, including mortgage lending, marketing and human resources roles. This is often regardless of whether the individual held the same, or similar, role at another organization. It is also true for those in mid-level to senior-level positions. The quandary is making it necessary for a job seeker to either accept the role at a lower range of pay or to look for a role in a different field.
Earning Less
Throughout most of 2023, the average new U.S. hire was paid less than the average new hire in 2022, according to MarketWatch. This follows what occurred in 2021 and 2022 when companies found it helpful to offer more pay for roles where workers were in high demand, according to data from Gusto, a payroll platform for small- and medium-sized businesses.
Wait and See
This turn of events is especially disheartening for job seekers when you consider that these lower-paying roles still come with senior-level responsibilities. Some are calling this a post-pandemic reset, which is particularly painful considering ongoing economic issues – an incredible blow to many job seekers.
Job openings fell to 8.5 million in March, the lowest level in more than three years. U.S. employers announced more than 322,043 job cuts since the start of the year, according to figures from Challenger, Gray & Christmas, an outplacement firm. The finance industry has seen the biggest decline in pay levels over the last four years with new hires earning 7% less in 2024 than new hires did in 2019, according to data from Gusto. In part this is because borrowing money is more expensive and fewer people are taking out loans. Rampant layoffs in the tech industry also mean fewer new hires.
Many find themselves in an inconvenient situation knowing that some work, even at low pay, is better than no work at all. But work still needs to get done, and that means current employees and job seekers will likely accept low-ball offers and take on more work with less pay.
