Currently, the ratio of available workers to job openings is about where it was pre-pandemic, as there are 8.7 million potential workers and 9.8 million job vacancies, according to the Department of Labor.
The labor market, however, is entirely different as companies are competing for that workforce like never before.
“Right now, I’d definitely say there is certainly some bargaining power for the workers,” said Ryan Gedney, chief economist for the Colorado Department of Labor and Employment. “When we talk about the labor tightness, that ratio of unemployed to job openings being similar to what it was pre-pandemic, it is a completely different labor market and situation, in terms of just every employer over the course of that last four or five months competing for that same amount of talent.”
You may have seen or heard of incentives employers have employed to attract workers as demand has surged back. Not only does that give a good baseline for negotiating power as someone looking for work, but it also gives an even better ceiling of things you may suddenly feel comfortable asking for.
“If [a company] wants to bring someone in, what does our remote policy look like? What do our benefits look like? What does our wage look like? You know, do we have to offer an hourly rate above what we were typically offering,” said Gedney.
According to the Department of Labor, average weekly wages in leisure and hospitality were up more than 10% in May of this year, compared to February of last year. That increase outpaced both inflation and the private sector, and according to the Federal Reserve Bank of Atlanta, this is one of the few times in history that pay for those with only a high school diploma rose faster than for those with a college degree.
“Very rarely over the course of the last 25 years is that bargaining power in the hands of the employees,” said Gedney.
And not only that, but the ability to move up within your field or transfer into a field without any prior experience has never been higher either.
Burning Glass, a labor analytics software company, says across the board, companies willing to provide training to employees were 49% higher in June of this year than it was in June of 2019. In utility companies, for example, the company found nearly 15% of employers were willing to train technicians compared to less than 1% in 2019.
“The quit rate is at a historical high for the US,” said Gedney. “This could mean a lot of different things. It means people are involuntarily quitting their jobs for other opportunities. In this current environment, where there are a lot of job openings available, people may be looking for higher-paying jobs, jobs with more flexibility in remote work, or just switching industries altogether.”