A Bullish Outlook for Employees

By Sandra Block
From Kiplinger’s Personal Finance

Mitchell Barnes, a labor-markets economist for the Conference Board, a nonprofit business and research organization, discusses the financial outlook for the workforce.

Question: A recent Conference Board survey projects that employers will raise their 2025 budgets for salaries by 3.9 percent from 2024, close to the highest projected annual increase in two decades. What’s behind the increase, and what does it mean for individual workers?

Answer: Companies want to continue to attract and retain workers in a tight labor market. Early in the recovery, as the economy reopened from the onset of the pandemic, there were abundant opportunities, and that gave workers leverage. The number of people quitting their jobs reached a record high in 2021–22, with many job switchers getting a pay bump. While that trend has slowed, companies are continuing to prioritize employee retention through competitive pay and other means. All of that contributes to keeping wages up.

This is an incredibly good economy if you’re an incumbent worker. Layoffs remain historically low, so workers enjoy a high level of job security. Gains in their wages and benefits are now going further as inflation recedes. It remains a very competitive market for in-demand talent, and we don’t see that fading anytime soon. Another piece of this equation is demographics, because the U.S. workforce is aging fast. Since the pandemic began, 5 million additional retirees are no longer in the workforce.

Question: What’s the outlook for people who are searching for a job?

Answer: We’re seeing some softening in hiring that is particularly affecting young people entering the workforce and those who are returning to work after taking time off. Demand for new hires has become less frothy and gone back to the levels seen before the pandemic. But that varies by sector: Manufacturing has been in recession territory for the past year or two, and firms in the tech sector have experienced bouts of layoffs after many of them increased headcounts amid surging demand in 2020–21. Overall, total job openings remain higher today than in 2019.

Recent hiring slowness may be partially due to uncertainty about interest rates, the economy and geopolitical risks. Despite strong business activity, some firms report that they’re hiring only for key roles or to replace workers lost through attrition.

Question: Several states and localities enacted laws in 2024 that required employers to include pay ranges in online job listings. Do you expect this trend to continue, and how has it affected employers’ compensation programs?

Answer: Twelve states have adopted transparency legislation, and about the same number have proposed similar legislation. We have seen the share of online job postings that list a salary range rise from about 7 percent in 2019 to about one-third in 2024. Some studies suggest that displaying pay ranges increases applications and the quality of applicants, and we continue to hear that from the employer side. Additionally, since the pandemic, all of us have talked more openly about our work and how much we’re paid. Especially when employers are trying to attract and retain talent that’s going to be in short supply, it’s an advantage to provide this information.

©2024 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.
The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.