Local economist explains what to expect from major wage increases
(WKBN) – You’ve heard it time and time again – jobs with big pay increases to attract new employees as they struggle to get people to work. This trend raises questions about the effects on the economy. First News asked an economist for answers.
So many young people entering the workforce for entry-level jobs earn, in some cases, between $ 15 and $ 20 an hour.
“The sharp increase in entry wages that has occurred since the start of the pandemic is a reaction to the strained labor market,” said Bill Adams, senior economist at PNC.
With high starting salaries, does this mean that employed people will have to quit their jobs to receive the salaries of new employees?
Adams does not necessarily say.
“I think people who are already employed are likely to get bigger increases this year,” he said.
He believes that if people don’t get these fair raises, they will leave and move on to the next job, which is already happening.
“April had the most people who had jobs, quit that job, and accepted work with another employer,” Adams said.
However, these wage increases cannot last forever. Eventually, he says the workforce will stabilize.
“The higher wage level that we are seeing now will persist. I don’t think wages are going to go down, but I think the rate of wage growth in 2022, 2023 will be much slower, ”Adams said.
As for those considering going to college, First News wondered if a starting salary of $ 15 to $ 20 that doesn’t require a degree might deter them from going.
“The decision to go to college, however, is one where people really plan to make a living for their entire living, and so I think that’s less influenced by the salary they’re going to earn this summer,” said Adams.
Despite labor shortages and economic inflation, Adams says these things can all end up being good for jobs and the economy.
“The outlook for the economy to grow is actually very good this year, so it will be a good economy, and we are going to see rapid job growth and strong wage growth,” he said.