In the current economy, changing jobs is the best way to get higher pay.
Those who recently started a new job saw an 8.5% increase in their annual salary in July, the largest median pay increase for those changing jobs in 20 years, The Wall Street Journal reports.
Continuing labor shortages and rising inflation are contributing to the pay raises.
While those seeking new employment have seen an increased salary, employees who have remained with their employer only saw a 5% increase as of July.
The income gap between job hoppers and those who stay seems to indicate that workers still have the upper hand when negotiating salary, despite the job market beginning to slow.
Employers are still paying premium salaries to convince new hires to come onboard.
In July, around 4.2 million U.S. employees left their current jobs.
Why it’s news
Starting a new job in the current market could have great rewards, but there’s also some risk.
If the interest rates continue to rise, businesses could start cutting down on the labor force, and the new hires with high salaries could be the first to go.
According to the PwC survey, technology, media, and telecom companies are planning layoffs over the next several months.
For employees who stay with their current employer, raises haven’t been able to keep up with inflation. In July, data from the Labor Department showed that consumer prices had risen 8.5% in a year. Around 60% of workers who found new employment between April 2021 and March 2022 received inflation-adjusted salaries. Less than half of employees who stayed put received the same, Pew Research Center found.