This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing the dynamics of the current job market — one that is quite possibly the most worker-friendly in many years:
The COVID-19 pandemic kicked off a severe labor shortage — and quite possibly the most worker-friendly job market in many years. Unpredictable demand shifts exposed pre-existing mismatches between the knowledge and skills of available workers and the tasks for which they are needed. The sheer number of available jobs has also been running far above the number of unemployed job seekers.
For example: Employers reported 11.4 million job openings in April 2022, while there were only 6.0 million unemployed persons.
This smorgasbord of open positions provides job seekers with more choices and more leverage. U.S. workers have been quitting their jobs at record rates, in many cases to join new employers offering higher pay, lucrative benefits, better working conditions, or the option to work remotely.
More intense competition for workers drove the average hourly wage up 5.5% for the year ending in April 2022, but inflation rose 8.3% over the same period, according to the Consumer Price Index (CPI). Unfortunately, real wages, which are adjusted for inflation, dropped as prices spiked. Workers don’t really benefit from wage gains unless they outpace inflation, because it cuts into their buying power.
Even so, labor shortages have been more acute in some industries, especially for lower-paying and in-person jobs, which led to bigger wage increases for some types of workers. For the year ending in April 2022, wages…
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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 25 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
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