- Real wage growth is uneven between those who are still at the same employer and those who have moved on.
- A new Pew Research Center report looks at which workers are seeing wage growth.
Over the last year, millions of Americans have joined the Great Resignation and left their jobs because of how much they were making among other reasons. A new report shows that job switching has payed off for many of them, even after accounting for inflation.
A new analysis from Pew Research Center highlights who is actually seeing wage growth after adjusting earnings for inflation, among other findings.
"What's happening is that people who are switching jobs are finding it more likely than people who are staying with the same employer to get a gain in real earnings," Rakesh Kochhar, senior researcher at Pew Research Center and one of the report's authors, told Insider. "So in that sense, there is a benefit to switching jobs."
The chart below of Pew's analysis of 12-month moving median year-over-year real wage growth based on Current Population Survey data shows the typical worker who has switched employers has tended to see an increase in real wages, and real wage growth has especially soared in recent months. This hasn't been the case for the median worker who hasn't gone on to a new employer; they have seen losses in real wages every month since October 2021.
Kochhar said the -1.7% for March 2022 in the chart means "that half of the workers who stayed with the same employer experienced a wage decrease of 1.7% or more" over the previous year based on data from April 2021 to March 2022.
Although half of workers who changed jobs saw real growth of at least 9.7% during that same period, Kochhar notes that some could have seen a loss in their real wages too. For the most part, however, job switchers seem to be seeing high real wage growth. If that is still the case in more recent months, then this may be good news as inflation soars, especially for goods such as groceries and gas.
Additionally, more recent 12-month moving average data from the Atlanta Fed's Wage Growth Tracker show that those who have switched jobs are seeing higher wage growth than those who haven't left their job. A "job switcher" here is defined as someone who is "in a different occupation or industry than a year ago" or "has changed employers or job duties in the past three months."
The tracker shows that this figure tends to be higher for job switchers. In June, these median numbers were 6.4% for job switchers and 4.7% for those who have stayed.
"Many people who are switching jobs are motivated by the desire to see higher earnings, and it looks like many of them are finding these opportunities," Kochhar said.
Additionally, Pew's analysis show some people who joined the Great Resignation had seen the benefit of heading to a new job in terms of their pay.
"From April 2021 to March 2022, a period in which quit rates reached post-pandemic highs, the majority of workers switching jobs (60%) saw an increase in their real earnings over the same month the previous year," the authors wrote. "This happened despite a surge in the rate of inflation that has eroded real earnings for many others."
The authors found 47% of US workers who were at the same employer saw real wage growth during the same time frame. That's less than the 54% of those who were at the same employer who saw that in April 2020 to March 2021.
"Job hopping is one of the easiest ways to gain a significant salary increase," Lauren Thomas, a Glassdoor economist, said in a recent BBC story. "While staying for a long time in the same role can result in below-market pay, finding a new job usually means instantly receiving the market rate."
Recent data shows in general real wages have fallen, though. Real average hourly earnings declined 3.6% over the year in June 2022, according to Bureau of Labor Statistics data.
The new report from Pew Research Center also highlights those who have left the labor force completely after saying goodbye to a job. Kochhar said "people are not necessarily leaving for greener pastures."
"Many people who leave employment one month are either unemployed the next month or they have left the labor force, even if just temporarily," Kochhar said, adding that this could because of a few different reasons like to leave the labor force to attend school.
Did you switch your job during the pandemic? Did you leave your job because you wanted higher pay? Contact this reporter at mhoff@insider.com.