Increased Job Openings Predicted to Cause Higher Wages
United States job openings have reached their highest point since 2001, according to the most recent Job Openings and Labor Turnover Survey (JOLTS), which includes figures for hirings, quits, and layoffs. Job openings rose 3.7%, with total hires increasing 1.9%. The number of quits has increased as well, rising 2.1% to 2.7 million.
According to a recent job survey, employers have created one million jobs since November and 257,000 since January alone. This is the fastest pace of job creation since 1997. With the new hirings come an increase in wages. Average hourly wages rose 0.5% in January, but average pay has only risen 2.2% in the past year.
According to Rick Friedman of ScholarlyHires.com, “the improving job market will actually pull people out of higher education, due to the slightly lower wage structure. Many of the backfills for these individuals, particularly on the staff side, will come from the ranks of the underemployed.”
Some job-seekers may become frustrated by the increase in job openings, as employers may favor hiring people from existing jobs to hiring candidates that have been out of work for any period of time. They may also avoid candidates who currently work part-time, but who wish to obtain full-time employment.
The new job openings have encouraged Americans to resume their search for employment. Over 700,000 people began looking for jobs in January. Job vacancies rose 29% in the past year and unemployment rates have dropped to a ratio of 1.7 unemployed people to every one available job. Employers are having to take longer to find suitable employees, and may soon have to begin offering higher wages to attract qualified employees from their current jobs.
As the job market continues to improve, applicants will gain the upper hand in the interview process, due to an increase in available jobs and decreases in unemployment rates. Wages are likely to rise significantly in the near future. Following the release of the JOLTS report, Pantheon Micro’s Ian Shepherdson sent a note to clients:
“In one line: Job openings continue to rocket; wage gains will follow.”