The rise in inflation isn’t a new trend – KPMG and other companies are concerned as well. The Consumer Price Index (CPI) measures annual increases in prices. As a result, job seekers today are looking for a job that offers competitive pay and benefits. As inflation continues to rise, job seekers have different expectations from employers. Here are three ways that this has affected their job search:
Remote Work Is Becoming More Popular
According to Adam Ozimek, Chief Economist at the Economic Innovation Group, remote work is a sweeping, transformative economic trend. Its rise in popularity is attributed to its affordability and the increased productivity it brings to companies. But it has its downsides. It has been cited as a reason why job growth is flattening, a major cause of the recent drop in hourly wages.
This pandemic also increased the popularity of remote work. It has several benefits, including commute-free workdays, lower stress, and a better work-life balance. It’s also cheaper for employers, which means they can offer lower wages. The National Bureau of Economic Research (NBER) has published a working paper that suggests that nearly 40 percent of U.S. companies have increased remote work options in the past year, with a similar number anticipating expanding these arrangements in the next year.
While the experiment was initially intended to be a temporary one, the results show that more than a third of American workers can now work from home, either full-time or part-time. That’s up from twenty-five percent in 2020, and almost six percent of workers are now working from home at least one day a week. Whether it’s for business or pleasure, teleworkers have become more popular as the cost of living increases.
People Are Staying In The Workforce Longer
Despite the looming economic gloom, many Americans are staying in the workforce longer than ever before. It’s a trend that is set to continue for years to come, as many older Americans look to supplement their retirement incomes or simply miss the routine of a job. The Bureau of Labor Statistics projects that by 2024, the senior workforce will outnumber the young. From 2014 to 2028, the labor force’s growth is projected to be 13.9%, whereas that of workers aged 65 to 74 is projected to be 50.8%.
The reasons for this trend are varied, but the most common one is pay. While wages have risen in recent years, people have increased their preferences for higher-paying positions. Inflation has made it difficult to stay in a low-paying job for long. Fortunately, the rise in wages is causing people to choose jobs with higher salaries. Inflation has also prompted companies to cut back on their services in some areas.
Despite this trend, the quit rate has been directly related to wage and price inflation. Moreover, higher quit rates usually precede periods of high inflation. This suggests that a rising quit rate would expand the supply of labor and lower labor costs. However, the relationship between job-to-job mobility and inflation is positive, as it suggests that there is a competitive nature among employers. However, Kashkari does not buy the Great Resignation.
Job Seekers Are Expecting More From Employers
Rising prices are pushing people to switch jobs, and this is changing the job search. While the average person can beat inflation by getting a big pay raise, the Great Resignation is spreading to other middle and high-wage sectors. For example, in March, the consumer price index rose 8.5%. In this way, job-switching has helped to boost inflation by one percentage point. The rise in job-switching is responsible for 20 percent of the increase in prices by 2021.
With high gas prices, job-hunters are more willing to work from home or from a remote location to save money on gas. This is bad news for people who are used to making a long commute. Many job-hunters are looking for remote jobs instead of commute-only jobs. While gas prices aren’t at their highest, they’re still high enough to cause job-hunters to look for a more convenient option.
A Wall Street Journal survey based on 2,064 U.S. residents in the past six months provides a compelling snapshot of how the job market has changed. While wages have continued to rise, the pace of wage growth is out of step with the Fed’s target. As Alex Domash, a research fellow at Harvard University, recently shared in the Wall Street Journal, the current rate implies a sustained inflation rate higher than 5%.