After a few years of hefty pay increases for new hires, the trend is reversing, potentially spelling the end to a brief golden age of wage growth for job seekers.
That’s according to data collected by online job board ZipRecruiter, which analyzed year-over-year changes in pay posted for more than 20,000 online job ads. It found that the average posted pay for more job titles declined more than increased so far this year. Last year, the opposite was true: Three-quarters of job posts offered higher pay compared to 2021. Additionally, 48% of companies surveyed by ZipRecruiter in July said they had reduced pay for certain roles this year.
Some of the decreases are dramatic: Posted salaries for CDL truck drivers are down 47.1% year over year, while Class A truck driver pay is down 32.9%, according to ZipRecruiter.
The industries experiencing the heaviest reductions in advertised pay include technology, travel, and transportation, among others, according to the survey results.
It’s a big shift from the last few years, during which many companies went on hiring sprees and offered new hires salary bumps not seen in decades to entice them during a tight labor market. So far, 2023 has been something of a reset, with some sectors, like tech, laying off workers and reducing pay.
ZipRecruiter’s survey results are in line with other economic data. The pay premium workers enjoy when they switch jobs has been falling all year, according to the Federal Reserve Bank of Atlanta’s wage growth tracker. Indeed reported a similar trend earlier this summer: Advertised wage growth has been slowing for the past year as the Fed has increased interest rates.
And Gusto, a payroll software company, reported that pay rates for new hires at small and midsize businesses were 5.1% lower in July compared to a year ago.
Both Indeed and ZipRecruiter’s data could be later reflected in the Fed’s, as the job sites analyze the jobs posted right now. ZipRecruiter’s also looked at new hires, which is a small percentage of workers.
It’s another sign of a cooling job market. Job openings have also softened, falling to about 8.8 million in July, per the latest data from the U.S. Bureau of Labor Statistics, compared to a peak of more than 12 million in March 2022.
All of that said, job openings and wage growth are still above pre-pandemic levels, at least on average. And there are some industries that are still paying above average wages for new hires, including in construction, tourism, and warehousing, according to Gusto. But economists say the decelerations on both fronts will likely continue into the fall as the job market normalizes.
Strong wage growth has been one of the drivers of inflation, according to some economists. It’s been the Fed’s focus to slow that down.
