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)