Wage Growth Tracker
Source: Federal Reserve Bank of Atlanta
Winners never quit — unless they want to see a bigger salary increase.
That is the conclusion of data analysis by the Federal Reserve of Atlanta. They found that “Quitters” earned higher percentage wage gains than those who stayed in their existing jobs.
To demonstrate this, the Atlantic Fed created the Wage Growth Tracker. 1 It shows that median wages grew by 4.3% for job switchers, while those who stayed in place saw substantially lower gains of 3.2%. Overall, median wages rose 3.6%.
Note these overall numbers differ from those reported by BLS, whose most recent NFP shows overall wage gains of 4.9% over the past 12 months. Atlanta Fed works off of microdata from the Current Population Survey (part of Census) while BLS uses their own Establishment Survey data.
Regardless of the absolute level, the underlying is sound: Employers looking to hire have had to raise salaries to attract workers. This not only leads to job switching within a given industry but has also led to career changes, as workers upskill and switch fields to have more lucrative careers. This also explains in part why so many low-skill, low-wage positions have gone unfilled.
Previously:
The Radically Changing Labor Market (October 8, 2021)
Elvis (Your Waiter) Has Left the Building (July 9, 2021)
Table Stakes (June 10, 2021)
Finding it Hard to Hire? Try Raising Your Wages (May 6, 2021)
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1. The Atlanta Fed’s Wage Growth Tracker is a measure of the nominal wage growth of individuals. It is constructed using microdata from the Current Population Survey (CPS), and is the median percent change in the hourly wage of individuals observed 12 months apart. Our measure is based on methodology developed by colleagues at the San Francisco Fed. The Atlantic Fed uses the 12-month moving average to smooth out the volatility in the data series.
Wage Growth Tracker
Source: Federal Reserve Bank of Atlanta
