(WKBN) – You’ve heard it again and again — jobs offering major wage bumps to attract new employees as they struggle to get people to work. This trend brings up questions about the effects on the economy. First News went to an economist for answers.
So many young people entering the workforce to entry level jobs are, in some cases, making from $15 to $20 an hour.
“The big increase in entry level wages that has happened since the pandemic began, that’s a reaction to the tightness in the labor market,” said Bill Adams, senior economist with PNC.
With high starting wages, does that mean people employed will have to leave their jobs to get the wages of the new employees?
Adams says not necessarily.
“I think people who already have a job are likely to get bigger raises this year from that,” he said.
He feels that, if people don’t get those fair raises, they’ll leave and head to the next job, which is already happening.
“April had the highest number of people who had a job, quit that job and take a job with a different employer,” Adams said.
However, these wage hikes can’t continue forever. Eventually, he says the labor force will level out.
“The higher level of wages that we see right now is going to persist. I don’t think wages are going to fall, but I think the growth rate of wages in 2022, 2023 will be much slower,” Adams said.
As for those considering college, First News wondered if $15 to $20 starting wages that don’t require a degree could deter them from ever going.
“The decision to go to college, though, that’s one where people are really looking ahead to a lifetime of earnings, and so I think it’s less influenced by what are the wages that they’re going to earn this summer,” Adams said.
Despite the labor shortage and the economic inflation, Adams says these things may all end up being a good thing for jobs and the economy.
“The growth outlook for the economy is actually very good this year, so it’s going to be a good economy, and we’re going to see rapid job growth and strong wage growth,” he said.