Graduates’ Increased Wage Expectations May Be A Harbinger Of Trouble For The United States Swindling Middle Class!

College graduates expect higher salaries than ever before

You might want to rethink your “now hiring” sign’s starting salary, especially if the employee in question has a college diploma.

According to the Federal Reserve Bank of New York’s November 2022 SCE Labor Market Survey, which was released on Monday, the average minimum salary for workers with a college degree is now $92,100.

The “reservation wage,” or the minimum salary at which Americans are willing to accept a new position, has been steadily rising since 2017, but it spiked during the COVID-19 pandemic due to the tightening labor market. Since July 2022, when it was $72,873, the average reservation wage has risen to $73,667 per month.

Workers in the United States have a newfound desire for higher wages, especially following the initial outbreak of the pandemic in March 2020. The median reservation wage for full-time workers rose by 19.4 percent between November 2020 and November 2022. Unemployed Americans saw a 12 percent increase in their wage expectations during that time.

Working People Are Largely Responsible For The Increase In Wage Expectations

It’s safe to say that the abundance of job opportunities has contributed to this increase in wage expectations. There were 1.7 jobs available for every unemployed person at the end of October, so people have more bargaining power and can demand higher wages.

Working People Are Largely Responsible For The Increase In Wage Expectations

Workers’ persistence in bargaining for higher wages probably also reflects the impact of high inflation. Inflation hit a seven-and-a-half-year high in November, putting a strain on the purchasing power of U.S. Average hourly earnings rose by 5.1% year-over-year that month, to $32.82 (or just over $63,000 annually). The increases haven’t kept up with inflation. The Payscale Index reports that in the third quarter of 2022, real wages fell by 3% year over year when compared to the same period in 2021.

While workers do expect higher wages now, New York Fed researchers found that they also place a high value on benefits as a means of increasing their disposable income.

Many Americans now believe it is more difficult to be part of the middle class, and one reason is that workers are having a harder time obtaining wage increases that keep up with inflation. Incomes have increased, but the percentage of the population that is the middle class has decreased over the past 50 years, according to the Pew Research Center.

According to data from a Gallup poll conducted in May of this year, roughly 38% of all Americans identify as middle class, while 14% identify as upper-middle class.

According to data from Bloomberg and economists at the University of California, Berkeley, the median real wealth of Americans in the 50th to 90th percentile (roughly the middle 40% of the population) reached $393,300 in March 2022, fueling a widespread economic expansion.

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Salaries For Recent College Grads Are At An All-Time High. Valued At Nearly $100,000

A recent survey found that today’s college graduates can anticipate an average starting salary of $103,880. But the numbers show that the actual starting salary is closer to $55,260, which is less than half of what is stated.

Real Estate Witch found that undergraduates overestimate their starting salaries by 88% across all majors and schools. And one-third are concerned they won’t have enough money to support themselves after college.

Salaries For Recent College Grads Are At An All-Time High. Valued At Nearly $100,000

The class of 2022 has better employment prospects than its predecessors. According to the National Association of Colleges and Employers, companies plan to hire 31.6% more students from the class of 2022 than they did from the class of 2021.

As of right now, however, only 15% of 2022 graduates have accepted a job offer, according to a survey conducted online between March 23 and 26 by Real Estate Witch and attended by 1,000 students.

According to NACE’s salary forecast from February, estimates for this year’s college graduates are all over the place. Mathematical and scientific majors, as well as those studying agriculture and natural resources, saw the highest salary increases, at 5.4%. Meanwhile, salaries for those with humanities degrees fell by 14.8%, while those with communications degrees fell by 4.7%.

The National Association of Colleges and Employers predicted that computer science majors would earn the most, with a median salary of $75,900 in 2022. Salary projections for humanities majors, on the other hand, were at $50,681.

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The Job Market Has Shifted Grads’ Salary Expectations

Probably because of how quickly things change in the job market, young adults tend to undervalue themselves. In 2020, “we went from a total deep freeze in the labor market,” said Julia Pollak, ZipRecruiter’s chief economist.

The impact of “that shock rippled through colleges and made everyone kind of terrified,” she continued. The situation abruptly changed after that.

The Job Market Has Shifted Grads’ Salary Expectations

A survey conducted by Real Estate Witch in March found that college students vastly overestimated their salary potential, anticipating an average annual salary of $103,880 upon graduation and entering the workforce for the first time.

That, according to Pollak, is because of the contrast between the two types of salary expectations asked for in the survey.

In her words, this “conservative way of asking the question” prevents respondents from considering their “pie in the sky,” or “wildest dream,” answer.

Prepare Yourself For Salary Discussions By Gathering Relevant Data

Do your homework to learn about salary ranges in your industry, whether you think you’re undervaluing yourself or overvaluing yourself.

Websites like Payscale, Salary.com, Glassdoor, and ZipRecruiter provide easy access to salary and market data.As Thurlow mentioned, salary data was also gathered from educational institutions.

Talk about money right away when meeting with recruiters. Thurlow advises that you find out the role’s budget up front to ensure it fits in with your expectations.

You can get a feel for the job’s market value and negotiate a better salary if you put in the time and effort to learn about it beforehand. In spite of this, “most employers set the pay in a role, assuming that some portion of candidates is going to try to negotiate for more,” Pollak said.

She advised that if a raise in salary is out of the question, employees should ask for other benefits instead, such as increased vacation time, the option to work from home, or formalized career development opportunities.

As Pollak pointed out, “the strange thing about negotiating for more pay is that often companies actually are impressed by it.”It demonstrates that “you have other options” and “you are confident in your abilities.”

Last Words

Half of those who had already accepted a job or internship out of the Yello survey’s total had multiple offers to choose from. According to Jeanette Maister, managing director for the Americas at New York City and London-based WCN, a software system developed specifically for high-volume campus recruiting, “students are more empowered than ever to choose where they start their professional careers.”

“On average, a student is considering 25 different potential employers. It was 12 in 2008. Recruiters, in turn, are cognizant of the rising competitive pressures imposed by this trend. It is becoming the norm for students to be on campus all year and for procedures to be expedited.”

Thirty-two percent of students who ultimately accepted a job offer said they learned about it at an on-campus hiring event, followed by the career center (21%), referrals (15%), and a job board (15 percent).

39% of students said the company’s website was the most useful research tool, followed by unbiased review websites (29 percent). Seventy percent said a company’s social media posts and behaviour influenced their decision to apply, with one-third saying they joined the employer’s talent community first.

Author

  • Karan Sirari

    I am an author and a public speaker. I was born in India and have travelled to many different countries. I have a masters in public communication from California University and I love to write about famous peoples from different industries.

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