If you want a raise, change careers.
In a post out Tuesday morning, the Atlanta Fed reveals that its wage growth tracker indicates the median wage increase for someone changing jobs hit 4.3% in May, the highest reading since December 2007.
Those in the same job have seen a median wage increase of 3%.
And the key point is how they define “job switcher” and “job stayer.”
Job stayers are with the same employer or industry as a year ago and with the same employer in each of the last three months. Job switchers are everybody else.
The signal here is that the labour market is rewarding those striking out to do something new, or as George Pearkes at Bespoke Investment Group said on Twitter, “The key insight is not that ‘oh [the Atlanta Fed is] fudging the numbers’ but rather that labour is receiving price signals.”
George adds: “It doesn’t really matter if someone has quit, gotten fired, whatever. Rather, if you get up and walk for any reason, you get a pay bump.”
In recent months we’ve noted that job opening are at a record, the quits rate is steady, and while payroll rains have slowed the unemployment rate is down and wages are up. The labour market, in other words, is tight and workers are in control.
As Neil Dutta at Renaissance Macro wrote in an email on Tuesday (emphasis mine): “Would rising quits and wage growth for job switchers be happening if they were worried about a stealth pool of depressed souls on the verge of coming back into the labour force to compete with them for the jobs? I don’t think so. The unemployment rate drop is for real and more or less giving you an accurate read on the jobs market.”