Quitters never win and winners never quit, the old saying tells us. That is true in so many parts of life, except for your career. 50 years ago, the American way was to get a job with a big company and stick with them for 30 or more years. That company would handle everything from your pay to your pension. And it worked. My grandmother retired from the phone company and they gave her a nice pension, $10 per month healthcare, and free long distance for the rest of her life. And that happened when free long distance was actually worth something!
Things have really changed in America, and it just doesn’t work that way anymore. Name one company you would trust to handle your compensation fairly for the next 30 years, and then also handle your pension. If you are anything like me, you would say none of them. There is no trust between big companies and employees anymore, and there shouldn’t be. We live in a time when companies want to get the most out of their employees for the least amount of money because that is what shareholders demand. That isn’t wrong, they are just doing their job. However, as employees, we have the same obligation to ourselves. I think that is where the American workforce is falling short right now.
If you haven’t noticed, the economy is doing really well right now. The JOLTS (Job Openings and Labor Turnover Survey) report was released this week, and it kind of blew my mind. In July of 2009, job openings hit a low of right around 2 million. Since then, job openings have increased at a pretty dramatic rate. They passed pre-recession levels in March of 2014, and have continued to rise to all-time highs. This month, the report showed that there are 6.2 million open jobs in the United States, an increase of over 300%.
I think it is safe to say that companies need people right now. Job openings have been rising much faster than hires have, so companies can’t keep up with their personnel needs. But guess what else hasn’t risen as fast as job openings? Compensation. If you look at the median wages for the American household for the last 30 years according to the FED, they appear to have been rising from about $24,000 per year to around $56,000 per year. This seems like a big gain. However, when adjusted for inflation, the median wage is higher than it was 30 years ago, but much lower than it was in 1999. For the last 20 years, real wages have been stagnant.
Why have wages not moved? In the last decade, the reason is obvious, and it ties directly back to the great recession. In 2008, people were thankful to have a job, no matter what job that was. That feeling is tough to get rid of, and for the last 8 years or so, we have been in a slow, painful recovery. Basically, we have had an 8 year hangover from the big party we had back in 2006 and 2007.
The point of all this is that we have had our coffee, taken a couple of ibuprofen, and consumed some Gatorade, and now it is time to get out there and quit our jobs. After 10 years of receiving 1-3% raises for busting our butts 40+ hours a week, go and see what else is out there. Find another company that will offer you 10-20% more than what you currently make and either go join them, or make your current company match it. Workers have all the power right now, but they haven’t been using it.
This is evidenced by the JOLTS quit rate, which measures the amount of people that quit their jobs in a given month. The quit rate bottomed out in 2009 around 1.3 million quits per month. Since then, it has taken 8 years to get back up to the pre-recession level of 2.2 million. However, this is still well below the 2.6 level seen in 2001. Why is that important? The quit rate tells us a lot about how confident the American worker is about finding a better job. The higher the quit rate, the more people that are looking for that next big pay raise. This hasn’t been happening, and it has a direct effect on real wages.
If you have been thinking about finding a better job, this may just be the perfect time to do it. Get out there and quit your way to more money!
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