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)