Most people look to the Bureau of Labor Statistics and its monthly employment report to understand the job market. While that is probably the best measure, there are other important signs, including how employers are treating employees and job candidates. A few months ago, I noted that almost every job posting now includes a list of benefits offered to new employees. Some are even listing a salary.
Employee retention is equally important. Bloomberg reports that some employers are now encouraging employees to use PTO and vacation time. A few employers are even paying bonus that employees can use during a vacation. Others offer “unlimited vacation.” These are the same companies who laid off so many workers that those who were spared worked extra hours and skipped vacation days. Now, as the job market tightens and employers still do not want to raise wages, vacation is a perk used to keep employees without increasing labor budgets.
If you’re asking for a raise or trying to negotiate salary with a new employer, think about vacation as a bargaining chip. If an employer cannot give you a higher wage, ask for an extra week of vacation or PTO. This is a good time to talk about time off.
Bloomberg is one of my favorite sources to learn about the economy and how it affects workers. Dan Moss, Bloomberg’s Executive Editor for Economy, has a short article on a good measure to understand how to gauge changes in hourly earnings. The Employment Cost Index (ECI) is a quarterly report from the Bureau of Labor Statistics. According to Moss, it “looks at how much employers are compensating the same position over a period of time. In other words, what is the pay of a builder, or plumber, or, God forbid, a journalist for a job over a period of time.” He says the number to watch is 2%, which is where the index has been stuck for a long time. Moss cites a forecast by Morgan Stanley that says the index will move to 2.6%, which he calls “encouraging.” I hope this is good news. In any case, it is good to have another tool to analyze what we are earning.
P.S. USA Today reported the latest ECI data, and the news was ugly. The second quarter increase was only 0.2%, "the slowest pace on record dating to the early 1980s." The article goes on to discuss how this lack of growth is odd given drops in unemployment. Employers should have to pay more to hire new employees and keep existing employees in a tight labor market. I will keep watching this topic and follow up with other news and views about how our very strange economy affects workers.
I was listening to sports radio the other day and heard a very interesting commercial. A trucking company was recruiting new employees, which in itself is a good sign. What was even more interesting was how they did it. The biggest pitch in the ad was that the company offered union scale wages. Our economy has been producing new jobs for the last 4-5 years. The problem has been that these jobs often paid horrible wages. Workers who kept their jobs received minimal or no raises. Maybe the ice is breaking when it comes to wages. Last month's job report included growth in higher paying types of jobs. This could be a great time to ask for a raise or test the job market.
The Bureau of Labor Statistics reported that 321,000 new jobs were added in November, and it revised hiring figures for recent months to reflect increased job growth. According to Daily Kos, there are still many Americans who are out of work or only able to find part-time jobs. That’s the downside. The upside is that job growth is starting to lead to higher wages. If this trend continues, that will be the real game changer. While hiring has increased the last two years, salary has not been increasing. If you’ve been stuck at a job that has been giving you small raises or no raises, it’s time to start looking for a new job.
It’s often too simple to judge job growth by the raw number of jobs gained or lost. Laura Clawson of Daily Kos breaks down this month’s statistics in a way that we should consider. I especially like a point she makes at the end of her article. We went into a deep ditch quickly. It’s unrealistic to expect a quick fix. This point is supplemented by another of Clawson’s posts on the impact of the sequester. I recommend them both as must reads.
In many posts, I’ve written about furlough days, changes in commission structure, and salary cuts. The impact of these changes in compensation is measured well in a report from the Bureau of Labor Statistics. Overall, hourly wages have fallen by 1.3% from December of 2008 to December of 2009. A quick look at the graph accompanying the article shows that most of the change occurred from July through December, which means we are still on a downward slope.
Generating new jobs is important. It is just as important to maintain good, living wages. Instead, many people are facing wage cuts at the same time that their share of insurance benefits are going up. Our political leaders need to find some way to protect workers as well as they protect special interests like banks and the pharmaceutical industry.
To read the report and see its eye-popping graph, click here.