Last week, the New York Federal Reserve Bank released its updated Labor Market Survey of Consumer Expectations (SCE) Report. The NY Fed updates this report three times per year. It measures actual and expected labor market activity.
One interesting finding from the July 2024 data shows that the “reservation wage” – the hypothetical wage that survey respondents identify as being sufficient to induce them to change jobs – dropped slightly from March 2024. The current reservation wage is $81,147, a drop of 0.8% from March’s reservation wage of $81,822.
In looking at actual labor market activity, mean salary among full-time workers was $85,191. That’s an increase of 1.87% from the mean full-time salary in March. More workers reported job changes in the July survey. 7.1% of respondents reported that they had started a new job in the previous four months.
Three-tenths of one percent of workers reported new unemployment in the preceding four months, a substantial decrease from the March survey, where 5% of workers reported becoming unemployed in the previous four months. 4.7% of workers reported exiting the workforce altogether. The number of workers who left the workforce increased by almost 2.5 times compared to the March report.
Job transitions are an important indicator of the relative safety workers feel about changing jobs and leaving the workforce.
The number of new jobseekers also rose, reaching 28.4%. That’s the highest reported percentage of workers actively seeking a new position in a decade. 19.3% of respondents reported receiving at least one job offer in the month of July. 10.8% of those who received job offers in July reported receiving at least two offers, and 6.6% reported receiving at least three offers. 3.3% of respondents reported receiving four or more job offers. The median offer wage was $68,905.
College degrees stabilize the labor market
These aren’t meaningless statistics. They show an increasing willingness of currently employed workers to seek new employment opportunities. The number of unemployed workers declined significantly, and the number of workers who were comfortable leaving the workforce (often due to retirement) increased. They express a basic level of comfort with the current economy.
The median offer wage also sets a certain benchmark. Survey data showed that 31.5% of people with less than a college degree sought new employment between March and July. That compares with 24% of people with college degrees. Additionally, 38% of people whose annual salary was less than $60,000 sought new employment, compared to just 20.7% of people with a college degree.
Changing jobs often brings a positive increase in earnings, so lower-paid workers are more likely to look for new work to increase their paychecks. Conversely, workers with college degrees tend to out-earn those without, reducing their need (or desire) to change jobs frequently. It also provides an explanation of why employers prefer college graduates, even when the work on offer does not require a college degree. Reducing employee turnover reduces their costs.
The latest Labor Market SCE provides more incentive for community colleges like WCC to focus on offering programs that prepare workers for high-wage, high-demand jobs. Increasing a graduate’s income reduces turnover, lowers employer costs overall, and increases the distinction between the earning potential of an associate degree compared to the earning potential of a high school diploma.
Photo Credit: Kathryn Decker , via Flickr
