While the number of individuals who are switching jobs remains relatively high, the pay raises that those individuals are receiving when changing one job for another have dropped to pre-pandemic levels, according to data published by the Bank of America Institute.
By the Numbers: Job-to-job (J2J) moves are still above 2019 levels, even though they’ve cooled since the “Great Resignation.” Median pay raises for job switchers have dropped to around 10%, below 2019 levels and significantly lower than the peak during the “Great Resignation.” During the Great Resignation, it wasn’t uncommon for an individual to receive a raise as high as 20% above what they were making.
- Middle- and higher-income workers are seeing the biggest declines in pay raises when changing jobs.
- Lower-income workers, especially in high-touch service sectors, continue to receive relatively strong pay raises.
Why it Matters: For credit and collection agencies, these labor market trends mean a potentially more stable workforce and lower turnover rates. However, attracting top talent might require offering more competitive salaries and benefits.
The Consumer Angle: The overall stability in the labor market suggests that many consumers are maintaining steady incomes, which is positive for debt repayment.
- Unemployment rates remain low.
- Pay disruption rates (PDR) are in line with pre-pandemic levels.
Between the lines: The decrease in pay raises, especially for middle- and higher-income groups, could mean less disposable income for debt repayment. Agencies should adjust their strategies accordingly.
