Workers are changing jobs and getting raises, and still struggling financially

Where have all the workers gone? As it turns out, most of them have gone... right into other jobs. [View this email online]( [Planet Money]( Musical Chairs In The Labor Market --------------------------------------------------------------- by Stacey Vanek Smith Where have all the workers gone? As it turns out, most of them have gone... right into other jobs. A new, nationwide survey from [NPR, PBS Newshour, and Marist]( finds almost 40% of American workers have changed jobs in just the last couple of years. The poll also finds nearly two-thirds of US workers got a raise in the last year. But many are still struggling financially. Debby Perta’s one of the millions of Americans who changed jobs during the pandemic. But she insists she is not a "job jumper.” "You couldn't do that back in my day," said Perta, 38, who had worked for one bank in Illinois for nearly a decade. "It looked bad on your resume." During the pandemic, Perta started thinking about making a leap. She'd gone as far as she could go at her company. She had family in Arizona and she thought her teenage son would like it there. Also, she'd been hearing about the country's hot job market, teeming with new opportunities. Donna Dunn/NPR Perta quickly landed a job managing a bank branch in Phoenix, told her coworkers "good-bye" and moved west. "This was not the norm for me," she said. "But it seems to be what people are doing now, right?" Yes, it is what many people are doing, with 38% of Americans changing jobs in just the last couple of years. More than half of the changers were younger worker — Gen Z and Millennials, like Perta. At the end of 2021, the rate of people quitting their jobs [hit the highest level ever seen on government records going back to 2000]( and that rate has remained at an historic high this year. “So freaking dynamic" Economists have a word for all of the churn we've seen in the job market: Dynamism. Dynamism can be defined as change, advancement and a restless entrepreneurial spirit, said Heidi Shierholz, president of the Economic Policy Institute. Ever since the Great Recession and the mass layoffs of 2008, workers grew security-oriented, hanging onto jobs and staying put, Shierholz said. "But now we are so freaking dynamic," she said. "And that is a good thing." If people are switching jobs, then they're very likely taking a job that's a better match for them, and that means the economy runs better, she said. "That's also very, very good for workers," she said. But there is also a dark side to all the dynamism. The constant hiring and training, as well as picking up slack for unfilled jobs, can be exhausting for both employers and workers. Staffing shortages meant that Perta — with her Master's degree, years of experience and manager title — spent most days filling in as a teller at the bank. Also, pay became an issue. Phoenix was expensive, and prices were rising. To help make ends meet, Perta had to make Doordash deliveries on the weekends. So, just six months into one new job, Perta started looking for a new, new job. Pretty quickly, she got one at a large financial institution that came with a raise. Now, Perta feels happy and challenged, and she's getting paid more. Economist Heidi Shierholz is encouraged by the flexibility and energy in the workforce embodied by Perta, but she worries that dynamism might be a bit delicate. The reason? Inflation and interest rates. If the Federal Reserve raises interest rates to try and bring inflation under control, Shierholz says, that could lead to people borrowing less and spending less; and to companies slowing or stopping hiring. And maybe even starting to lay people off. But for now, she says, things are looking strong, and American workers like Donna Perta are killing it: changing jobs, getting hired, quitting their careers and starting businesses [in numbers the US has never seen before](. Keeping an eye on the prices of Hot Pockets, even after getting a raise The NPR Marist poll also found that 61% of US workers have gotten a raise in the last year. But that doesn't necessarily mean all people's financial situations have gotten better. Take Donna Dunn, 49, of Booker, Texas. "We're really in the middle of nowhere," she said of her town, where she is the office manager of a healthcare clinic. Dunn gets a 3% cost of living raise every year, but the real cost of living in the US has been rising a lot faster than her paycheck. Last year the average worker got a pay rise of 5%. But [recent data]( shows inflation is running nearly three times that rate, at 8.3%. When people see their wages go up, but prices are rising faster, economists call it "the money illusion." Paychecks might look bigger, but simple math shows you’re actually losing money. In fact, if you adjust for inflation, U.S. workers have gotten one of the biggest pay cuts on record over the last year. Average hourly earnings — when adjusted for inflation — decreased about 3 percent between August 2021 and August 2022, [according to the US Bureau of Labor Statistics](. This was not surprising to Dunn, who has five kids, a tight budget and has developed an encyclopedic knowledge of food prices. "I used to be able to get a dozen eggs for $2.69. That exact same dozen eggs just today was $4.89," she said. "The large boxes of Hot pockets, the 36 count box, used to be $8.99. Now that same exact box — and it only has 24 in it — is $13.90." To try and deal with the rising prices, Dunn made swaps: pork instead of beef, PB&J instead of deli sandwiches and no more eating out. Even then, her family food bill went from around $700 a month to more than $1,600 and Donna was drowning. She's reluctantly choosing which bills to pay, and not pay. “I have a dentist bill that I haven't got paid yet because I have to work it into the budget,” she said. “That's already split so tight and it's very difficult to get government assistance.” Cornell University Economist Francine Blau says the money illusion is destructive: people work hard, get their raise, and yet they keep falling behind. If they ask for more money to keep up, that can push prices up further, because companies raise the prices of the stuff they sell to afford those raises. “The problem is you can get into a spiral,” she said. “Where inflation gets built into expectations and prices just start to rise in a vicious, upward circle.” Blau says she hopes that in the future, wages will continue to rise and prices will start holding steady. Meanwhile, more than a third of those polled in the NPR Marist survey said their finances had gotten worse in the last year, and an increasing number reported falling behind on bills. Donna Dunn’s employer offered raises to help with inflation, but the money wasn't enough. So she found some workarounds. Actually, she's grown them: in her vegetable garden and on her mom's farm. "I'm on a trade system with one of the other farmers," she said. "She has chickens and brings me the eggs and I give her tomatoes and zucchini and cucumbers." It’s maybe the most old-school way to deal with the money illusion: not using money at all. Not subscribed? [Subscribe to this newsletter.]( Want to send this to others? [Share the web-version of this newsletter on social media.]( Want more Planet Money? 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