Younger Workers Hold Out for More Money, Fed Data Shows
Younger workers are holding out for higher salaries than they were when the pandemic began, even in a job market with high unemployment and fewer job offers, according to a new report from the Federal Reserve Bank of New York.
In the survey, conducted by the New York Fed every four months, people under 45 said the minimum salary they would accept for a new job had risen 10% between March and July, climbing to an average of $68,655—the highest since at least 2014, the report released Monday showed. By contrast, workers over 45 demanded a slightly lower so-called “reservation wage” averaging $60,168 in July compared to $61,261 in March.
Although the increase may seem counterintuitive, it could reflect the reluctance of people who still have jobs to make a change in an uncertain labor market, said Heidi Shierholz, an economist at the Economic Policy Institute think tank and former chief economist at the U.S. Department of Labor under President Barack Obama. Another possible factor is the increased risk of working during a pandemic, particularly for younger workers who have occupations that require heavy social contact.
“If you are out of work, your reservation wage probably doesn’t go down as far if the jobs are all of a sudden a ton more dangerous than they were before,” Shierholz said.
Among workers who had jobs in March, 10.5% were unemployed in July. Workers over 45 were hardest hit, with 11.8% reporting being unemployed, compared to 9.5% for their younger counterparts. And only 13.5% of workers reported receiving at least one job offer in the past four months, down from more than 19% in March.