What is the minimum wage you would require to make a job switch?
According to a new survey by the Federal Reserve Bank of New York, the median minimum salary Americans would need to accept a new job—the average reservation wage—is just under $80,000.
Data from the Fed’s July 2023 Survey of Consumer Expectations reveals that the wage floor for people in the United States has skyrocketed by $6,000 to $78,645 since last year.
The minimum pay demand for men is around $91,000, while the average reservation wage for women falls short of that by $25,000. College graduates seek no less than $98,600 for a job move, compared to the $63,300 required by workers without college degrees.
Pay expectations are significantly up from years prior, as Americans have been forced to contend with an economic downturn, riddled with high inflation and a possible looming recession, a cooling labor market and subsequent job insecurity.
Inflation has substantially driven up the cost of living, so people require more money to maintain their quality of life. Despite the wave of layoffs from mid-2022 to now, the U.S. job market still remains tight, giving workers leverage to demand higher compensation. However, continued economic uncertainty makes workers more cautious about leaving their jobs without sufficient financial motivation.
Additional Insights From The New York Fed’s Survey
The survey reveals high salary expectations among employed workers post-pandemic and continued anxieties around labor demand and hiring. The respondents feel relatively stable and satisfied for now, but uncertain about changing jobs without significant incentives.
- Sixty-three percent of currently employed respondents said it would take a pay increase of at least 10% for them to leave their current role.
- For the median worker, a 20% pay increase would be required for them to switch jobs.
- About 25% of workers would require a pay increase of over 25% to consider leaving their job.
- Younger workers have lower pay thresholds for switching jobs compared to middle-aged workers.
- Half of workers strongly or somewhat agree they have job security in their current role.
- Thirty-six percent of respondents feel it would be easy to find a new job if they started searching.
- Around 60% of workers are satisfied with their current work arrangements.
- Fifteen percent of respondents expect to work from home five days a week in their next role.
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