What’s the minimum salary you’d require to accept a new job offer? Americans say their magic number is $73,000 a year, according to a recent survey from the Federal Reserve Bank of New York.
Every four months, the Fed asks a nationally representative sample of about 1,300 Americans about their experiences and expectations in the labor market. The latest survey results from July 2022 show that workers’ average “reservation wage,” or desired minimum salary, is up 6% from the same period a year ago.
That’s in keeping with the general upward trajectory of Americans’ salary expectations in the months since the pandemic first hit in March 2020. The highest reservation wage reported to date was $73,283 back in March of this year.
There are several possible explanations as to why US workers expect bigger paychecks from new employers these days. The labor market remains tight, with 528,000 new jobs added in July—meaning that many workers have reason to be confident about their ability to negotiate higher wages.
Meanwhile, inflation is driving up the cost of living: Last month, consumer prices were up 8.5% from the same period a year ago. Workers are eager to increase their earning power accordingly, and switching jobs is typically the best way to get a big raise.
Fed survey data suggests plenty of workers are indeed on the hunt for new gigs: nearly 25% of respondents said they’d been searching for a new job in the last four weeks, the highest portion since March 2014 and up from 24% in July of last year. The Fed notes that the year-over-year increase was driven by people under age 45 and those with college degrees. Note to prospective employers: Be prepared to pay up.
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