It's been awhile since most American workers have seen a decent raise. And a lot of them are getting fed up.
As the government's monthly employment data continue to show a sustained pickup in hiring, the pool of jobless workers on the sidelines — ready to take whatever pay they can get — has been shrinking. When labor markets tighten, and there are fewer jobless candidates for each new position, Economics 101 suggests that wages should start rising.
Judging from the latest monthly wage data, workers looking for a raise may be disappointed.
American employers expanded their payrolls by roughly a quarter million new jobs last month, capping a year that saw overall employment levels rising by nearly 3 million. That's the best annual showing since the end of the Go-Go '90s.
But economic growth underlying that payroll expansion has yet to translate into economic benefits for workers. Even as the jobless rate fell to 5.6 percent, employers felt little need to boost wages to fill new positions or keep their existing workers happy. Adjusted for inflation, hourly earnings actually fell 0.2 percent in December from the previous month, and November's gain was cut in half to 0.2 percent. Hourly wages ended 2014 just 1.7 percent higher than a year earlier.
That's a lot less than the 3 to 5 percent raise that roughly half of those surveyed by job site Glassdoor say they're expecting this year. About a third of those counting on a bigger paycheck said they'd look for a new job if they don't get it. In a separate survey commissioned by job site CareerBuilder, 2 in 5 workers said they didn't get a raise last year, and half of them plan to find a new job this year.
Bolting for better pay
It's not hard to see why many American workers are ready to bolt for a better paycheck. Their productivity continues to rise—thanks to everything from factory automation to round-the-clock communications. But for more than a decade, that added output has cost employers little in the way of higher wages.
The gain in productivity has helped boost profits and push stock prices higher, but done little to increase wages.
"Skilled workers will have more leverage this year as the competition for labor becomes more intense across a variety of job functions."
That may help explain why workers fed up with longer days and after-hours emails—with nothing to show for in their paychecks—may be ready to start looking for a new job.
Job seekers are also emboldened by the faster pace of hiring and a drop in the unemployment rate, which has boosted confidence among many workers. Just 13 percent of workers surveyed by Glassdoor said they're afraid of getting laid off in the next six months. That's half the share who feared layoffs at the end of the Great Recession.
If the unemployment rate continues to fall, some candidates for hard-to-fill positions will have a stronger bargaining position as the job market continues to tighten.
"Skilled workers will have more leverage this year as the competition for labor becomes more intense across a variety of job functions," said Rosemary Haefner, head of human resources at CareerBuilder. "Employers expect to increase salaries on initial job offers in 2015 and may be more willing to negotiate other perks such as flexible work arrangements."
Lack of leverage
It's been a long time since workers had much leverage when it comes to wages. A lot depends on your occupation, industry and gender. Women's wages still lag those of their male counterparts in most industries and occupations, though wage gains for men have barely kept up with inflation since the Great Recession.
Wages aren't the only gripe American workers have with their current job.
Half of those surveyed by CareerBuilder said they feel like they just have a job, not a career. The sentiment is felt most by younger workers (ages 18 to 24), two-thirds of whom lack a career path. Across all ages, a quarter of workers who feel careerless plan to find a new employer this year.
Workers said they have lots of other reasons to start looking for a new place to work. Nearly 1 in 4 said they feel underemployed; 1 in 5 feel undertrained; a quarter feel overlooked; another quarter said they're stuck with no chance for promotion; a third rated their boss' performance as "poor" or "fair,"; and 1 in 6 said they're not happy with their work-life balance.
Employers looking to keep these restless workers on their payrolls—or hire them for new positions—will likely have to come up with a better salary. But job seekers are also factoring other considerations before they decide to jump ship, according to CareerBuilder's survey.
That list includes job stability (65 percent), location (57 percent), affordable benefits (55 percent), good work culture (46 percent), flexible schedules (40 percent) and chances for promotion (39 percent).
Other perks cited by prospective candidates were half-day Fridays (40 percent), on-site fitness center (22 percent), daily catered lunch (21 percent), massages (16 percent) and a dress code that allows jeans (15 percent).