The wage floor for American workers climbed to a record high close to $79,000, according to a Federal Reserve Bank of New York survey released Monday that also found pay demands among women are rising twice as fast as for men.
The average reservation wage – the lowest annual pay that workers would accept to take a new job – increased to $78,645 in July, according to the New York Fed’s most recent Survey of Consumer Expectations. That’s up from about $72,900 a year earlier and $69,000 in July 2021.
Pay expectations among women in the labor force rose 11% in the past year, twice as fast as for men, the survey found. Still, there’s a substantial gender gap when it comes to what’s an acceptable salary. For men, the average reservation wage was about $91,000 — and for women, it was $25,000 lower than that.
Average Reservation Wage
Women increased their wage expectations by 11% over the past year
Source: Federal Reserve Bank of New York
Workers with a college degree now expect $98,600 annually to accept a new job, compared with an average of $63,300 for those who don’t have one.
For comparison, the median US household income was $70,784 in 2021, according to the U.S. Census Bureau. Data for 2022 will be released next month.
The new high in the reservation wage comes as American employers added 187,000 jobs last month, following a similar increase in June. The unemployment rate, at 3.5%, is close to the lowest level in decades and average hourly earnings were up 4.4% in June from a year earlier.
Earlier Retirement?
Still, there are signs that the labor market is slowing. The Fed survey found that the average expected likelihood of receiving multiple job offers in the next four months declined to 20.6% from 25.7% a year earlier.
One piece of bad news for employers in the Fed data is that US workers increasingly see the prospect of earlier retirements — suggesting the pool of available labor could shrink.
The average expected likelihood of working beyond age 62 declined to 47.7% from 48.8% in July 2022, the lowest reading since the start of the series in March 2014 and down by more than a percentage point over the past year. The figure has been declining since Covid hit.
Working Beyond Age 62
The average expected likelihood of working beyond age 62 declined to the lowest reading since the start of the series in March 2014
Source: Federal Reserve Bank of New York
Those data could suggest that older people see the labor market as unappealing, or that the pandemic made more of them think about retirement.
The reservation wage for people whose household income is below $60,000 peaked one year after Covid-19 was declared a pandemic, at about $50,800, and has fallen by more than $3,000 since then — while the figure for higher earners continued to rise.
Reservation Wage Income Distribution
Higher-wage respondents continue to expect more pay
Source: Federal Reserve Bank of New York
On the heels of the Supreme Court's decision to overturn Roe v. Wade, major corporations added abortion travel costs to their employee benefits. New research reveals these policies help recruit new workers but may alienate some current ones—especially men.
Since the Supreme Court’s Dobbs decision last summer, 15 states have banned abortion, and more states have instituted partial abortion bans. As a result, many big-name U.S. companies, including Apple
The new research analyzed how those companies that offer travel assistance and related care fared compared to similar companies that do not provide such benefits. After finding both advantages and disadvantages for the companies offering abortion assistance, the researchers conclude that extending reproductive benefits is likely a win for an organization’s bottom line.
The researchers examined data from Indeed, the largest job search site in the U.S., and Glassdoor, which aggregates reviews of employees and worker salary information. The large-scale study analyzed 3 billion clicks on U.S. job postings and 6.5 million company reviews. Completed by researchers at Indeed, the University of Southern California, the University of Maryland, and the IZA Institute of Labor Economics, the results were posted on the research network SSRN for discussion.
Post-Dobbs Announcement Led To Improved Recruiting
Examining the clicks on job postings on Indeed, the researchers found an almost 8% increase in interest in job postings by companies after they offered to pay for access to abortion. Not surprisingly, the effect was most pronounced for jobs that tend to be in female-dominated areas.
Research from LeanIn.Org revealed that the majority of those under age 40, regardless of their political affiliation, want to work for a company that supports access to abortion. Many of these employees would consider switching jobs to preserve this access.
Backlash From Male Employees
Despite the increase in recruitment, some employees weren't so happy that their organization decided to take a stance on abortion. For companies that announced abortion-related benefits, Glassdoor ratings of senior management and company culture took a hit. The drop in ratings for management came predominantly from employees in male-dominated jobs. Although the researchers don't know the gender of the Glassdoor raters, they assume that the ratings from those in male-dominated positions are primarily men.
The authors acknowledge that a small number of outspoken employees could have influenced their findings. "There could be a vocal minority of workers who are angered by these announcements while the 'silent majority' of existing employees do not change their opinions," they write. Past research about consumer behavior indicates that people are generally more likely to share bad experiences than good ones.
Critics of these abortion travel policies have been vocal about their opposition. Most notably, U.S. Senator Tommy Tuberville blocked promotions for hundreds of military personnel due to the Department of Defense’s policy that pays for travel expenses associated with an out-of-state abortion. Texas legislators threatened Logan Green, the CEO of Lyft, with "swift and decisive action" after he tweeted that the company would cover costs for employees who had to travel more than 100 miles for an abortion. And the Conservative Political Action Coalition (CPAC) provides a list of "woke companies" to "expose these corporations which have betrayed America's values." The CPAC list is based on the post-Dobbs policies the companies announced.
The negative management reviews analyzed in the study did not state the reason for the worker's displeasure. It may have been driven by personal views on abortion or a belief that companies shouldn't take a stance on politicized issues. It's also possible that male employees were upset with a policy that predominantly benefits women.
Interestingly, companies that received lower ratings after their post-Dobbs announcements were also more likely to give a raise to their employees. The more severe the decline in employee satisfaction, the greater the pay raise. The researchers speculate that companies may be attempting to compensate the employees who are most unhappy about the abortion-related policy. Overall, the companies who announced these benefits increased posted wages on Indeed by 4% more than those organizations that did not alter their policies.
Overall Win For Companies Offering Abortion Benefits
Although these policies lead companies to attract some employees and alienate others, the advantages likely outweigh the disadvantages. Emily Nix, a professor of finance and business economics at the University of Southern California and an author of the study, explains, "When it comes to their workforces, probably more firms that are on the margin of making such announcements should do this, with the exception of firms whose workforces are more male and more conservative-leaning.” She explains that the increased search interest is worth 12% in wages, but firms with disgruntled employees only raised wages by 4%, so the companies should come out ahead financially. “Of course, it will take more time to see if the boon to recruiting leads to gains in long-term profitability for these firms,” Nix adds.
There is also evidence that those attracted by these policies may be higher quality employees than those turned off by the benefits. Prior research on job seekers has found that when a firm advertises work as socially-oriented, it attracts more productive employees who produce higher-quality work. Although more investigation needs to be completed in this area, this research suggests that those attracted to the firm because of its abortion-related policies may outperform those who disapprove of the benefits.
Companies With Female CEOs And Female Workforce More Likely To Offer Benefits
Companies that extended benefits post-Dobbs have some commonalities. For example, organizations led by a female CEO were more likely than those with male leadership to extend reproductive benefits after the Supreme Court decision. Organizations with more women in their workforce and on their corporate boards were also more likely to make a post-Dobbs benefit announcement. Prior research has found that female leaders generally cultivate more female-friendly workplaces and abortion-related benefits seem no exception.
One example, Julia Hartz, CEO and co-founder of Eventbrite
Organizations whose CEOs donate more to Democratic candidates were also more likely to extend benefits. The same is true if the firm’s workforce contains more Democratic-leaning workers.
For those employees who want to seek out companies that have instituted these travel policies, the researchers were able to locate 487 of them. Lists of these organizations compiled by Leopard.fyi, a platform designed to help women find hospitable work environments, and Rhia Ventures, a venture capital firm targeting women's health, provide a great start.
American Airlines (AAL.O) pilots have approved a new four-year contract, which their union on Monday hailed as "unprecedented" in terms of gains secured in one agreement.
The Allied Pilots Association (APA), which represents 15,000 pilots at the Texas-based carrier, said 72.7% of the pilots voted for the deal, which secures more than $9.6 billion in additional value compared with their prior agreement.
Pilots at U.S. legacy carriers American, United Airlines (UAL.O), and Delta Air Lines (DAL.N) are securing vast gains in wages and working conditions in new agreements reached this year as travel soars after a sharp decline during the pandemic.
"It's unprecedented and historic," the Allied Pilots Association's president, Captain Ed Sicher, told Reuters on Monday.
"For pilots, the biggest victory is not just the wages but the work-life stuff."
The 48-month contract brings pay improvements including about $1.1 billion in immediate, one-time payments and ratification bonuses. On average, pilots will see an immediate pay raise of more than 21%, the union said in a release.
Quality-of-life improvements represent nearly 20% of the increased value of the new contract. For example, pilots would get premium pay if the company reassigns them from a trip they bid on, or have asked to fly, Sicher said.