If salaries offered to new hires accurately reflect the balance of power between employers and job applicants, the wage jumps spurred by the pandemic's "Great Resignation" appear over. In addition to signs that a tighter labor market has halted that frenzied period of employment swapping, companies are reportedly slashing pay scales for new recruits, reversing a surging trend from 2021 and 2023, when businesses scrambled to fill openings.
The "Great Resignation" arose as countless employees--usually younger people--changed their perspectives on work once pandemic lockdowns ended. Following that dark period, life appeared too short for many workers to continue sticking with low paying jobs they'd tired of, but clung to anyway. Many bolted bad gigs to pursue better opportunities elsewhere. But that mass rush of quitting left employers clambering to fill essential positions, creating ferocious competition for recruits that drove pay 22.7 percent higher since 2020.
But tightening labor markets over the past year brought that movement to a halt. People who in early 2023 could still risk leaving their jobs when unemployment stood at 3.4 percent are disinclined to continue doing so as that rate rose to 4.3 percent in July. Consequently, companies with openings to fill see the supply and demand balance tilting back their way, and are cutting the pay scales they had earlier boosted.
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