Workers Wage Expectations for New Jobs Jump in July

One of the inflation factors the Federal Reserve watches carefully is changes in wages. Their theory is that higher wages are a major driver of inflation, even though wage growth hasn’t for the most part kept up with the growing cost of living.

The news, then, out of the July consumer survey from the Federal Reserve Bank of New York won’t be one to cheer the inflation hawks at the Fed. The mean job offer wage expectation within the next four months, conditional on expecting an offer, was $67,416. That is the highest point since the survey series started in 2014.

Back at the beginning of the surveys, which are nationally representative according to the New York Fed, the average job offer wage expectation was $48,829. During the March 2023 survey, the mean expectation was $58,710, down significantly from $61,187 in November 2022. A year ago, the answer was $60,310.

The expectations do seem both in and out of the context of other things consumers said about wages and the job market. The average annual salary for full-time workers was a reported $79,111, with a range of $48,000 to $98,000. A year ago, the mean salary was $75,964 with a range of $48,000 to $94,000.

The disparity between existing mean salary and expected wage offer is significant. There are several reasons that could explain this. One is that people who might be looking for a job are less qualified for higher salaries and so don’t have expectations in keeping with the salary ranges people receive.

The mean full-time job offer wage in the previous four months, though, was $69,475. The percentage of survey respondents who had searched for a job was 19.4%, so perhaps a significant number of people were doing some informational job searching and finding that their current job offered better compensation. In this most recent survey, only 59.9% of the respondents were satisfied with wages at their current job; 64.9% were satisfied with nonwage benefits. And only 53.5% were satisfied with prospects of advancement.

There was also a high reservation wage for job seekers. The average lowest wage people said they would be willing to accept in a new job was $78,645, with a range running from $48,000 to $100,000. Only 26.2% thought they would get a counteroffer from a current employer.

The overall picture sounds like many people are checking around, don’t necessarily have the highest expectations of what they’ll find, are already doing well, are unlikely to get a boost from a current employer, and yet are only partly satisfied on average with wages, benefits, and career advancement potential.