Expert Urges Employees to Act Now for Higher Pay: 'Make Your Moves Immediately'

The latest government jobs data shows that the US labor market is still strong, with an unemployment rate of just 3.5%. This is a record low, and indicates that there are plenty of job opportunities available.

President Joe Biden announced on Friday that the unemployment rate is currently the lowest it has been in the last 50 years. He also noted that the past two years have seen the strongest job growth in history. These achievements are a testament to the hard work and dedication of the American people.

As the Federal Reserve looks to curb inflation, there is the risk that the job market may decline in 2023. The question is whether that will result in a "soft landing" or full-blown recession.

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"Even though the economy may be improving, we're still going to see layoffs and a softer labor market," said Andy Challenger, senior vice president at outplacement firm Challenger, Gray & Christmas. «For workers who are looking for jobs now, time is of the essence,» he said.

Challenger noted that it is better to make moves today rather than waiting six months. He advised people to take action as soon as possible.

According to Daniel Zhao, lead economist at Glassdoor, the latest data shows that job switchers have seen 7.7% wage growth as of November, while workers who have stayed in their jobs have seen 5.5%. These figures come from the Atlanta Federal Reserve.

However, workers may not be currently seeing wage bumps quite that big, due to the fact that data looks back over the past year, the Federal Reserve Bank of Atlanta's Raphael Bostic said.

In order to keep up with inflation, higher pay has been needed. The consumer price index, a measure for a wide basket of goods and services, was up 7.1% in November compared with the previous year.

According to data on average hourly earnings, wage growth has increased by 4.6% over the past year.

Zhao said that people who switch jobs are much more likely to be getting a raise above inflation than people who are staying in their jobs.

Curt Long, chief economist and vice president of research at the National Association of Federally-Insured Credit Unions, has cautioned that real wage growth may exceed inflation in 2023 if present trends continue.

With a possible economic downturn looming, workers who are seeking higher pay face a more complex decision as to whether to stay or leave their current job.

According to Julia Pollak, chief economist at ZipRecruiter, the gap between wage growth for job switchers and job stayers is the highest on record, at 2.2 percentage points versus 0.7 percentage points historically.

According to Pollak, there is a strong incentive for workers to change jobs frequently.

She said that new pay transparency laws, which require employers to disclose the pay ranges they're willing to offer new employees for advertised positions, may also help.

The laws are currently in effect in Colorado, California, Washington and New York City. In September, New York state will follow.

You can find information on average salaries for different jobs and locations on websites like ZipRecruiter, Glassdoor, and others, regardless of where you live.

According to Pollak, even some workers who have been laid off are finding that they are being offered higher pay rates than they were earning before. This is due to the fact that pay rates are becoming increasingly competitive.

Pollak stated that the best way to know your worth is to get an outside offer, which makes the whole thing real. This way, you can see how much another company is willing to pay for your skills and experience, which can help you negotiate a better salary at your current job or with a new employer.

According to Pollak, workers who see new hires getting paid more may want to approach their current employer.

Tell your boss that you love your job and have learned a lot, but that you could make more money elsewhere. Pollak suggests saying, "If you can match that, I would be thrilled to stay."

Employers may have more reason now to pay to retain talent. A record 4.5 million workers quit their jobs in November, an 8.9% increase from the previous month. This is the highest number of quitters since the Bureau of Labor Statistics began tracking this data in 2000.

Long said that there is still a lot of job churn, with people leaving their current jobs and finding new ones at a higher rate than before the pandemic, but lower than it was early in 2020.

According to Challenger, if you want to earn more money, you need to put in the work and win job interviews and job offers.

"It's the way you go out and prove your value in the marketplace," Challenger said.

If you choose to pursue another job opportunity, you should be aware that your current employer may not match the salary offer.

Challenger noted that you need to be willing to move if you want to find success.

Making a big career move right before an economic downturn is always a balance of risk, according to Challenger.

If a company decides to pursue layoffs, they may follow a “last in, first out” policy that leaves the newest hires with pink slips. This policy is not without risk, as it may be difficult to find new employment in a falling market.

"You have more negotiating power now than you will in six months," he said.

Zhao said that while the job market is still healthy, it is not as hot as it was six or 12 months ago. In 2023, this may translate to slower hiring and subdued plans for pay raises.

Before making a move, it's worth considering whether there are aspects of your job that can make up for not getting the exact raise you want. For example, if you can negotiate working from home one more day per week, that can help save money on gas or other transportation costs, Zhao said.

Zhao noted that base pay isn't everything, and that other forms of compensation like benefits and the value of happiness in one's current position should also be considered.

After evaluating your options, it may be best to take an "educated risk," he said. This means being informed about the potential risks and rewards of your decision, and making the best choice you can with the information you have.

Zhao pointed out that if you're unwilling to take risks, it will be hard to get the kind of job or pay raise you want.