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The insider's edge on job search & hiring™

Do you want a job, or higher pay?

pay

 

No sign of a recession, but wage growth is flatlining.

Source: The New York Times

pay

The first story: Jobs are plentiful and unemployment low. Most everyone who wants a job can find one…The second story: Wage growth is flatlining. For most of the last few years, pay to American workers has been rising at steadily increasing rates…But that rate of increase now seems to have leveled off or decreased. The year-over-year rate of growth in wages peaked at 3.4 percent in February and has receded to 3 percent in October, according to the latest numbers…

So most people can find a job and more people are working, but employers are not having to increase compensation much to recruit and retain people. This isn’t what economic models suggest should happen.

 

Nick’s take

Do you want a job, or higher pay? Because the U.S. Department of Labor says you can’t have both. News articles focus on big growth in new jobs but then can’t explain essentially flat pay in a market with high demand for labor. Meanwhile, companies are spending less and pocketing more: “compensation in private industry rose 3 percent in 2018, and only 2.7 percent in the 12 months ended in September.” Nothing’s changed. (See B.S. on the jobs numbers.)

What’s your take?

  • Are you making more money?
  • How much does your CEO make as a ratio compared to you?
  • Why don’t the Department of Labor numbers make sense?
  • When will job applicants wise up?

 

 

 

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22 Comments
  1. I have degrees in two fields – my undergraduate degree is in electrical engineering. My master’s degree is a dual major degree in organ performance and church music (basically I know the ins and outs of being a cathedral organist). Let’s use my music background as an example. Back in the day when a church having an organ (pipe or electronic) was the norm along with a choir, there were plenty of church organist positions. These jobs, very part-time (but you work every Sunday and holiday), were plentiful. I found that once I earned a master’s degree in the field, the full-time cathedral jobs were rare indeed (I knew this going in, and I’m not sorry I did it). I was a full-time music director in a large church for 5 years and then returned to engineering (albeit reluctantly at first).

    The part-time jobs in this part of music were typically held by someone who was a pianist and had to learn what to do with 32 pedals in a pedalboard and 2, 3, 4, or 5 keyboards for the hands. As you can imagine, this instrument is difficult to play and takes years to hone that skill. Churches, as non-profit organizations, have to watch their pennies, so they will typically hire a clergy person full-time, and the rest of the staff is part-time. Today, most churches have replaced the pipe organ (or its electronic equivalent) with ensembles of musicians such as guitarists, percussionists, and keyboardists typically performing on a voluntary basis.

    My whole point is that well-paying jobs are out there in many fields, but not many of these well-paying jobs exist. The ones that are plentiful are the ones that do not pay well. I hope my example as a church musician is helpful. By the way, I do help a local church out once in awhile when they need an organist either as a substitute or for special occasions. I don’t miss having to be there every Sunday! (You can’t easily call in sick – I had a bad cold one Christmas Eve. I still worked.)

    • The numbers make perfect sense IF… there are enough people for the work that needs to be done.

      Prices fall when supply outstrips demand. Counting inflation wages probably are falling.

      If it’s flat then there is no need for any more immigration except at the high pay CEO level perhaps.

  2. In my region of the country, at least, there’s no shortage for low-level/lower-wage grunt jobs. A lot of smaller “mom & pop” shops are where the jobs seem to be = low wages. I’ve seen this with Class B CDL roll off truck drivers at my current workplace too. I’ve seen drivers walk off the job, or get terminated, on a Friday morning, and they’re re-employed that same afternoon, often at a higher wage + a sign on bonus.
    For the past 4 years, I’ve supplemented my day job by teaching part-time as an adjunct two evenings a week in a 9 month welding program at a local community college (worked as a welder many years ago as a much younger man). I see decent welding jobs going begging, as well as decent machinist jobs too. I still think skilled trades are a safe hedge. Most of the comments on this site appear to come from older white collar workers. I’m 62, and now too am a white collar worker. I think older white collar folks need to have “eyes in the back of their heads” and develop a “mercenary attitude”. Always have your ear to the ground, and have a side gig or passive income stream. Its no secret that employers today have little to no ethics, and no lyalty to their employees.

  3. This article in USA Today tries to tackle the unemployment/wages conundrum:
    https://www.usatoday.com/story/money/2019/11/14/wage-growth-why-isnt-pay-climbing-faster/2580205001/

    It seems some of the media are starting to nose around, but no one is addressing the elephant in the room: our job-board employment economy.

    • This article is nothing but a puff piece – there is a root cause, but the writer is merely guessing.

      There is a root cause. So what is it?

  4. CEO pay as a multiple of my pay? 68x. A coworker whose pay ratio was 78x just left because he hadn’t had a raise in seven years. Not that this was unique; it seems to be the norm here. But when he repeatedly mentioned his dissatisfaction I looked up the increase in the cost of living over those seven years. 15%. Coincidentally, his new job pays 15% more, effectively returning him to the status quo of where he was seven years ago.

    Another coworker just left for a job that pays more but involves a great deal of travel. He’s hoping for the other offer to come through that would pay roughly double what he’d been making here. He’s also looking to relocate to a lower cost housing market since he just had to get out from under the property he’d bought.

    A third coworker, admittedly a marginal talent that shouldn’t have been hired in the first place, is at a 96x ratio. He’s also looking to file bankruptcy.

    Am I making more money? Yes. After some turnover someone up the ladder realized that I was the only one holding things together for this team and if I left, we had people on the payroll but we had no bench. A breach of contract with the client would happen before any replacement was up to speed – or a loss of the contract when renewal time came. So they tossed me a retention raise, a bonus, another retention raise, and a pair of bonuses for helping recruit a guru to help piece this team back together. This contract is a major part of their revenue; I guess you get raises when your departure could affect the stock price.

  5. •Are you making more money?

    yes, only because a new job with a larger company and set my target salary higher, which they agree to.

    •How much does your CEO make as a ratio compared to you?

    no idea. Privately held company.

    •Why don’t the Department of Labor numbers make sense?

    Every Statistics student is urged to read “How to Lie with Statistics” which covers how you can paint any picture you want using numbers.

    But seriously, the labor pool is very diluted because it is global, and companies just don’t need as many people to generate goods. Many ‘goods’ we sell are non-tangible such as software. Which can be produced and supported anywhere, which leads back to the global nature of work today.

    •When will job applicants wise up?

    As long as people need jobs, they won’t. As long as people need jobs to get health insurance, they won’t.

  6. Jobs are plentiful.

    What isn’t plentiful are companies willing to fill those jobs at market rates with people who are not purple squirrels.

    If companies were actually filling positions, more people would move to new jobs or re-enter/enter the workfoce….which would force companies to either pay their existing people more or offer more to potential employees. When fewer people move, you get a stickiness to the labor market. Things stay the same.

    And it doesn’t have to be all about money. I’ve seen a few articles that talk about how a not-insignificant portion of people with jobs looking to move do not have money as their prime motivator. They’re bored or seek new challenges. Companies looking for purple squirrels further impede this group. Why would anyone take a new job doing the exact same thing, possibly at the same wage?

    • @ Chris
      “Why would anyone take a new job doing the exact same thing, possibly at the same wage”?
      Tell me about it! I’ve been looking at jumping ship at my current train wreck of an employer for two years. A non-compete, and being fed up with my current industry, keeps me from making even a lateral move. But what the rub is, employers in parallel industries that are paying 20-30% less than what I make now (I make 30% less now than I did ten years ago when I was laid off from a competitor of my current employer). Add to this ageism (I’m 62, look 45, or so I’m told), and it’s pretty disconcerting. Purple squirrels? They need to put this on their Indeed.com postings, because that’s what they want. Personality profiles apparently show folks like us have a back bone, and these purveyors of purple squirrels don’t want this!

      • @Antonio: Don’t let a non-compete agreement intimidate you. Check the laws of your state – my state seems non-compete agreements to be illegal. You may have other rights, but your employer won’t tell you that.

        Maybe it’s time to bring back unions.

        • @ Kevin.You may have a valid point on returning unions. Non-competes in my state are airtight. I’ve spoken with an attorney in my church. In 2010, I was laid off from an employer of 6 years tenure that made everyone sign a non-compete. They went after those who violated them. Sometimes, judges will side with the people who signed non-competes as the prevailing attitude is “how can you hold someone to a 1-2 year non-compete, and prevent them from earning a living”? Another weapon in employers dirty and unethical tool box of shenanigans. In this current case, I’ll violate the non-compete and take my chances. What, are they going to take my birthday away from me? These Draconian laws on non-competes need to go, at least if an employer terminates an employee.

          • @Antonio: I’m sorry to hear about that non-compete agreement. I am glad you talked to a lawyer. Interestingly, the state where I live that makes non-compete agreements illegal is also the world’s fifth largest economy.

            • Kevin, you live in Texas? My friend lived in Houston and worked for a large petrochemical company. When they cut him loose, he violated his non-compete. They sued him, but he won. The judge ruled that they couldn’t let him go, then deny him the ability to earn a living. I signed mine in Missouri. Across the river, in Kansas, my lawyer friend at my church told me he gets clients out of non-competes regularly, but Missouri, is airtight and very much favors the employers (big lobbies??). Like I say, if necessary, I’ll take my chances next go around, if that happens. I moved to my area 32 years ago from Minneapolis. I’ve seen first hand, and experienced, employers bouncing paychecks here. In Minnesota, if an employer bounces payroll, the attorney general’s office, and the local sheriff’s department, comes in and shuts them down until they make good on the paychecks. In Missouri, you’re at the mercy of the employer. I’m. Not a proponent of big nanny state government, but working folks need some protection from predatory employers.

  7. California

    • I’ve read that California requires employers to pay accrued vacation to employees when they leave, either voluntarily or involuntarily. ??
      In 2010, I was laid off from my job of 6 year in a buyout/downsizing by a large domestic steel mill. I secured part-time employment, but spent the next 13 months (never been out of a job more than 2 months tops)looking for a job. I landed at a mom & pop shop, that was unethical (not paying their vendors, bouncing paychecks, violating every OSHA and EPA law known, and at a 50% reduction in salary to boot. At one year I had a stellar evaluation. When I asked about a raise, I was informed that “your job is reward enough”. I started a stealth job search. A month later, I turned in my 2 weeks notice (in retrospect, should have walked out the door). The Plant Manager called me in for an “exit interview”. Suddenly, I was berated and told I was a terrible employee, they were ready to let me go, etc. (how I fell from grace in 30 days, I wondered??). When I asked about my two weeks of vacation I earned, he refused to pay it out. I got up and walked out the door two full days before the start date for my new job.

      • Yes, California requires the payment of accrued paid time off. In fact, if you bounce a paycheck in California, you might as well close down.

        Many businesses do not like the regulatory environment here. Even so, it is still the world’s fifth largest economy. It might be expensive here, but there is also a lot of opportunity.

        Many companies speak only of cutting costs. Increasing revenue also works.

  8. About a year and a half ago, I took a pretty good gig at a local community college, it was something I wanted to be doing. Previous to that I was unemployed then working an underwhelming job for about 6 months.

    Literally within the first two weeks of me starting the job at the CC, I had several “recruiters” start harassing me about the crap they were peddling. And they all knew I had started a new role. At first I just ignored the calls, but since they kept calling, I essentially told them that if their client wasn’t paying at least $X I was not interested. Of course they balked. I then pointed out the fact that I was unemployed 6 months earlier and would have taken substantially less, but you were pulling out every excuse as to why I couldn’t be placed – The irony was lost on them.

    • Good for you, sir. These hook-and-crook Johnny-come-lately recruiters and headhunters (IMHO are far too venerated on this site and others) need to hear your message loud and clear. They’re your friend when they need something. Now that you’re gainfully employed in what sounds like a sweet gig, and you give them your terms, and hold up a hoop for them to jump through, they’re suddenly butt-hurt.

  9. Don’t know if this one’s been covered, it’s from two years back but I only just now came across it, woman’s interview was canceled after she asked about salary/benefits —
    https://www.buzzfeed.com/ishmaeldaro/skip-the-wages

    • Interesting article, and sadly, true! Back in 2011-2012 I was out of work for 13 months during this last recession, save for a part-time evening adjunct teaching gig at a CC. I was sent by a headhunter to an interview for a newly created inside sales that went south the minute I walked in the door. I extended my hand to shake hands, the manager refused, and he coldly told me to follow him back to a conference room. For the next 20 minutes he talked without pause about his notch count from all the people he had terminated, how he had no problems terminating people on a whim, and what “he” expected. When I asked about compensation and benefits, he became triggered and told me it was a meet and greet, and that I didn’t ask those kinds of questions in a meet and greet. He then asked me if I was interested. I told him no, even though I was desperate. I’ve been immediately disqualified before, especially from Indeed.Com jobs, when I’ve simply asked “so what does a position like this pay”? I’ve also got the game “what kind of wage are you looking for”? My reply is “I’m looking for what it pays”. If perspective employers are secretive about compensation now, I WALK! I’ve personally wasted time, gas, and precious PTO time on interviews where I’m ghosted, or they blind side with a substandard chump change offer. One wouldn’t sign into a mortgage, or a car loan, if they didn’t know what the installment payments would be.

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