Job Seekers Hit Wall of Salary Deflation: The salary bump that people who switch jobs used to command has vanished

By Katherine Bindley and Lynn Cook. As you can see from the related posts listed below, this is a big change from 2022. Excerpts:

"The salary difference between those who stay in their roles and those who change jobs has collapsed to its lowest level in 10 years, according to the latest federal data. 

Job stayers increased their wages by about 4.6% in January and February. Meanwhile, those who switched jobs received only slightly more at 4.8%. That gap has narrowed considerably since the start of 2023, when job switchers could fetch an average salary bump of 7.7%, compared with job stayers’ 5.5%."

"Even in the tech industry, where not so long ago workers bounced around for big raises with ease, more people are hanging on to the job they have.

Workers who negotiated their salaries during the pandemic when the sector drove big pay increases, especially at high-growth tech firms, aren’t likely to find a new job for more money than they are already making."

"In the second half of 2024, median pay decreased between 1% and 2% for several roles, including software engineers, product designers and technical program managers"

"Bumps in pay were reserved for certain high-demand employees such as hardware engineers and data scientists."

"Senior and midlevel leaders in tech face the most pronounced pay drops of between $10,000 and $40,000 a year"

"Even in artificial intelligence, managers overseeing machine-learning teams have seen compensation shrink by $10,000 to $20,000 a year as companies focus on hiring practitioners over leaders."

"The number of American workers who quit their jobs last year hit the lowest level since 2020, federal data show, and some economists expect even fewer people to quit in 2025."

"many internal job changes amount to a “dry promotion”—one that comes with a bigger title and more responsibility but without the money to match" 

See also Americans’ Growing Reluctance to Quit Their Jobs, in Five Charts: Workers are voluntarily leaving their positions at near 2019 rates, after record job switching in recent years by Harriet Torry of The WSJ, Oct. 23, 2023.

Related posts:

Job Switchers Are Earning a Lot More Than Those Who Stay (July, 2022) 

Workers Quit Jobs at a Record Level in November (January, 2022)

The percentage of Americans leaving employers for new opportunities is at its highest level in more than two decades (June, 2021)

Baseball’s Wealth Gap Has Become a Chasm—and Is Stretching the Sport to Its Breaking Point

As a new season gets under way, the financial disparity between MLB’s 30 teams has never been greater, alienating fans, distorting the game and making a long work stoppage all but inevitable

By Jared Diamond of The WSJ. 

Exciting to read an article about baseball that mentions the Gini coefficient (well, exciting if you're an economist). More on that after some excerpts:

"Based on a widely used measure of economic inequality known as the Gini coefficient, overall team spending on payroll and luxury tax this season projects to be the most unequal since at least 1985"

"It’s a system the MLB Players Association has defended ferociously for the union’s entire existence. The NFL, NBA and NHL all have salary caps. Only baseball players have held out, a victory they consider among their greatest accomplishments. The players are so opposed to the concept of a pay ceiling that the last time owners seriously attempted to introduce a cap in 1994, the World Series was canceled because they all went on strike." 

"History has shown that owners and players can resolve their issues without a cap. Baseball saw similar inequality in the late 1990s and early 2000s, when the New York Yankees were cementing themselves as the “Evil Empire.”

In response, the 2003 labor deal formalized the luxury tax and established the framework for the modern version of revenue sharing, mechanisms that act as subsidies to the less wealthy clubs. Disparity decreased over the next 15 years—before skyrocketing again in the 2020s. Over the past three offseasons, the Mets, Dodgers and Yankees have spent more on free agents than the teams that ranked ninth through 30th combined."

"the Dodgers . . . signed a 25-year, $8.35 billion deal with Time Warner Cable in 2013"

"The economics of baseball franchises are notoriously opaque, but teams are required to submit an audited financial statement every year. It doesn’t factor in every potential revenue stream, like team-owned entertainment districts around their stadiums. Nor does it account for increases in franchise valuations, which continue to climb. But the document provides a window into how teams are faring on a year-in, year-out basis.

In 2023, the most recent data that has been shared with teams, franchises were divided into three groups, people familiar with the matter said. About one third of teams reported earnings of around $20 to $55 million before interest, taxes, depreciation and amortization, around half of which were small-market teams benefiting from revenue sharing checks.

Around another third took losses of $20 million or more. The remainder roughly broke even."

"The most recent baseball team sale saw the Baltimore Orioles go for $1.73 billion last year. At the same time, NFL and NBA teams have been selling for double or even triple that amount."

"Since MLB expanded to 30 franchises in 1998, teams ranked in the top five in payroll have averaged 89 wins a season. The next five teams averaged about 86 victories, with that figure plummeting to just 74 for those in the bottom five."

"Sixteen different organizations have won the World Series since 1998, the most of any major American sport. There hasn’t been a repeat champion in baseball since the Yankees claimed three straight from 1998 to 2000."

Gini coefficient from Wikipedia does a good job of explaining the concept. The way it is calculated is it can be as low as 0 and as high as 1. If everyone made the same income, G = 0. As G goes higher, it means that the higher incomes groups are getting a higher percentage of total income and/or the lower income groups are getting a lower percentage of total income.

Related posts: 

Some sports economics articles: How the trade hurts Luka Doncic financially, the value of the Eagles and Ohio State and how much people lose betting on sports (2025)

The economic impact of the Super Bowl is met with skepticism from economists (2024)

Winning the Stanley Cup Is More Taxing Than Ever (2024)

Would you pay $24 million for a great conversation starter? (2024) (A jersey worn by Babe Ruth sold for $24.12 million)

Two sports economics items: Shohei Ohtani impact on tourism & the pay of NFL running backs (2024)

Some Olympic medal winners get alot of extras (2024)

Economic benefits from mega-events like the Olympics are often overstated (2021) 

Do states with income taxes put their sports teams at a disadvantage?  (2021)

Striking out: estimating the economic impact of baseball's World Series  (2021)

March Madness Is a Moneymaker. Most Schools Still Operate in Red.  (2021)

How Much Is The Average MLB salary? (2021)

As Covid-19 Closes Stadiums, Municipalities Struggle With Billions in Debt (2020) 

The San Antonio Spurs And Federal Subsidies (2016) (The Spurs received $41 million in federal subsidies to build the AT&T Center with little economic gain for the community-multiple studies show major private sports stadiums don’t ultimately produce substantial economic growth relative to the government incentives they receive)

Do Tax Rates Affect Where Tennis Players Decide To Live? (2015)

Even If You Don't Like Sports, You Might Be Paying For Them (2011)

Does It Pay to Host the Olympics? (2009)

What Economists Say About "March Madness"  (2009)

Sports, Economics and Politics Collide When Government Officials Get World Series Tickets (2009)

New York City Tax Payers To Pay $1 Billion To See Baseball (2008)

The Flutie Effect: When The Teams Win, More Students Apply To The College (2008)

Would you and your significant other get married if the government paid you $14,000? What if they paid the two of you to have children?

See Even a $14,000 Government Handout Can’t Get South Korea’s Singles to Marry: State-sponsored dating has become a phenomenon in a country with rock-bottom fertility rates; ‘I don’t want my parents to find out’ by Soobin Kim and Dasl Yoon of The WSJ. Excerpts:

"State-sponsored dating has become a phenomenon here."

"City governments launched matchmaking services and other incentives to boost the world’s lowest birthrate. The national government has expanded parental leave and increased cash payouts to newlyweds."

"Fewer than 5% of births come outside of wedlock."

"Saha-gu, a district in South Korea’s second largest city of Busan, offers singles who match at its events around $340 to spend on dates. Those who get married receive roughly $14,000 upfront and are feted with housing subsidies and more cash to cover pregnancy-related expenses and international travel. No participant has claimed the prize for marriage."

One company "pays its employees roughly $75,000 each time they have a baby."

A church "gives its members $1,380 for each childbirth."

"around 42 districts launched matchmaking events between 2022 and last August"

"Seoul tries to speed up the get-to-know-each-other phase by offering a bundle of tickets and restaurant vouchers to its matches."

Related posts:

The Economy Affects The Birth Rate (2010)

Did The Recession Help Lower The Birth Rate? (2011)

A number of women who put off having babies after the 2007-09 recession are forgoing them altogether; more educated women and student debt also contribute to decline in birth rates (2018

Should the Government Pay People to Have Sex? (2007) 

Can you choose when to have your baby born if it brings you some money? (2024)

Worldwide Efforts to Reverse the Baby Shortage Are Falling Flat: Subsidized minivans, no income taxes: Countries have rolled out a range of benefits to encourage bigger families, with no luck (2024)

How Odysseus Started The Industrial Revolution

Factory work may have been a commitment device to get everyone to work hard. Odysseus tying himself to the mast was also a commitment device. Dean Karlan, Yale economics professor explains how commitment devices work:

"This idea of forcing one’s own future behavior dates back in our culture at least to Odysseus, who had his crew tie him to the ship’s mast so he wouldn’t be tempted by the sirens; and Cortes, who burned his ships to show his army that there would be no going back.

Economists call this method of pushing your future self into some behavior a “commitment device.” [Related: a Freakonomics podcast on the topic is called "Save Me From Myself."] From my WSJ op-ed:

Most of us don’t have crews and soldiers at our disposal, but many people still find ways to influence their future selves. Some compulsive shoppers will freeze their credit cards in blocks of ice to make sure they can’t get at them too readily when tempted. Some who are particularly prone to the siren song of their pillows in the morning place their alarm clock far from their bed, on the other side of the room, forcing their future self out of bed to shut it off. When MIT graduate student Guri Nanda developed an alarm clock, Clocky, that rolls off a night stand and hides when it goes off, the market beat a path to her door."

 See What Can We Learn From Congress and African Farmers About Losing Weight?

Something like this came up recently in the New York Times, in reference to factory work and the Industrial Revolution. See Looking at Productivity as a State of Mind. From the NY Times, 9-27-2014. By SENDHIL MULLAINATHAN, a professor of economics at Harvard. Excerpts:

"Greg Clark, a professor of economics at the University of California, Davis, has gone so far as to argue that the Industrial Revolution was in part a self-control revolution. Many economists, beginning with Adam Smith, have argued that factories — an important innovation of the Industrial Revolution — blossomed because they allowed workers to specialize and be more productive.

Professor Clark argues that work rules truly differentiated the factory. People working at home could start and finish when they wanted, a very appealing sort of flexibility, but it had a major drawback, he said. People ended up doing less work that way.

Factories imposed discipline. They enforced strict work hours. There were rules for when you could go home and for when you had to show up at the beginning of your shift. If you arrived late you could be locked out for the day. For workers being paid piece rates, this certainly got them up and at work on time. You can even see something similar with the assembly line. Those operations dictate a certain pace of work. Like a running partner, an assembly line enforces a certain speed.

As Professor Clark provocatively puts it: “Workers effectively hired capitalists to make them work harder. They lacked the self-control to achieve higher earnings on their own.”

The data entry workers in our study, centuries later, might have agreed with that statement. In fact, 73 percent of them did agree to this statement: “It would be good if there were rules against being absent because it would help me come to work more often.”"

The workers, like Odyssues, tied themselves to the mast to resist the temptation of slacking. This made it possible for factories to generate the large output of the Industrial Revolution.

Here is the link to the Journal of Economic History article by Professor Clark

Factory Discipline

Here is the abstract 

Related posts:  

Would you pay someone to make you work hard? (2022)

Can You Mix Economics With Religion? (The ancient Greeks a god of commerce and a god of wealth) (2022)

Are payday-routine videos a commitment device? (2023)

An Economic Approach to Homer's Odyssey by Tyler Cowen (2025)