By Zoe Han
The latest jobs report shows the labor market is still strong, but some workers say they've been forced to take jobs that pay almost half what they earned before
Martin-John Rubio had been job hunting for a year when he saw a posting in early 2024 for a role in talent acquisition that was similar to his previous job, which he had left after his contract ended. But instead of the $33 an hour he'd been earning before, the listed pay was $17 an hour.
Rubio was flummoxed, so he sent the job poster an email.
"I said, 'Hi there. I was just curious - was this a typo? Did you mean to put $27 or $37? Because it says $17. ... It's located in Silicon Valley. There's no way that anybody would take that job,'" he told MarketWatch.
He didn't get a response.
"I wasn't trying to be a smart-ass," Rubio said. "Because $17 an hour? I mean, Christ, the fast-food people earn more than that nowadays."
California fast-food workers started earning $20 an hour this year, and throughout the U.S., low-wage workers overall have seen their pay rise faster than any other group since 2019. But some white-collar workers say the current job market is the most difficult they've ever experienced.
For jobs in industries like mortgage lending, marketing and human resources, some companies are offering salaries that are lower than what new hires had been making at their previous jobs, often for the same type of role - and especially for those in midlevel to senior-level roles. Some job seekers say they've had to accept that lower pay or leave their field entirely.
What's going on? After a hiring spree in 2021 and 2022, when some companies had to offer higher salaries to fill roles for which workers were in high demand, many of those same companies are now trimming the pay they offer new hires, said Paaras Parker, chief human-resources officer at the human-capital-management platform Paycor.
"The math would tell you, then, they would have to pay less for other types of roles," Parker said. "Because there's just not more money available."
For most of 2023, the average new hire across the board in the U.S. was paid less than the average new hire in 2022, according to data provided by Gusto, a payroll platform for mostly small and medium-size businesses.
A 'wait and see' economy
Marilyn Driscoll, who lives in the Chicago area, was making $115,000 a year, or about $55 to $60 an hour, as a senior technical recruiter. After her contract expired in August 2023, she expected to find a new position within a month or two. But as that stretched into half a year, she found that most of the roles she was applying and interviewing for were paying about 30% to 40% less than she had been making.
"You look at the jobs on the [job boards] and you just have to laugh," she said.
A recruiter for one job told Driscoll in an interview that the pay was $20 per hour. "This has got to be a mistake," she responded. She said in an interview with MarketWatch that she would not take a job like that one, which came with entry-level pay but senior-level responsibilities.
"It's soul-crushing," she said.
Brett Jansen worked as a chief growth officer before being laid off in November. In an interview for a similar role, a recruiter told her that nobody was getting paid as much as she had been making before. The job market was going through a reset after salaries got inflated during the pandemic, Jansen was told.
'You can't pay people less when the cost of living is what it is right now.'Brett Jansen, now CEO of her own company, Health Tech House, LLC
She thought that was unacceptable. "You can't pay people less when the cost of living is what it is right now," Jansen told MarketWatch. "You can't pay people less to do the same job that they were doing previously."
The overall labor market looks strong, but the latest government data shows scattered signs of a slowdown. While unemployment remains low, job openings in the U.S. fell to 8.5 million in March, the lowest level in more than three years. Most new jobs were in three areas: government, healthcare, and leisure and hospitality.
Worker wages continue to rise, but some employers across the country have been reducing wages for current job openings, business leaders told the Federal Reserve in the latest Beige Book.
Many employers are hesitant to recruit new workers because of economic uncertainties and rising costs, according to Liz Wilke, the principal economist at Gusto, who called it a "wait and see" economy.
The finance industry has seen the biggest decline in pay levels over the past four years, with new hires earning 7% less in 2024 than new hires did in 2019, according to Gusto data.
That's partly because there are fewer jobs for loan officers now, Wilke said. A series of interest-rate hikes by the Federal Reserve that started in 2022 has made borrowing money more expensive, which means fewer people are taking out loans.
'You look at the jobs on the [job boards] and you just have to laugh.'Marilyn Driscoll, a former senior technical recruiter
The tech industry is also seeing a drop in pay for new hires, said Rahul Yodh, vice president of talent acquisition at New Western, a real-estate investing company.
Two and a half years ago, he said, tech was the most candidate-driven market out there. Job offers were "more than generous," and many of them were open-ended - meaning that if a candidate declined the offer but went back to the company a year later, the company would still be open to hiring them, Yodh told MarketWatch. "That would never happen today."
As Driscoll, the former technical recruiter, described it: "People were throwing stupid money at us."
Doing more work for less pay
U.S. employers have announced more than 322,043 job cuts since the start of 2024, according to the latest figures from the outplacement firm Challenger, Gray & Christmas.
Along with those layoffs, workers looking for new jobs not only saw lower pay, they also saw roles that required them to do more.
Driscoll saw one posting for a job in Austin, Texas, that paid $115,000 to $125,000 a year. The role involved managing recruiters along with marketing recruitment efforts and other duties. "This is easily five different roles," she said, adding that the pay for such a job should be more than $200,000.
Companies have also had to recalibrate remaining employees' responsibilities after layoffs, Yodh said, noting that unless a company decides to eliminate a project, the work still needs to get done.
Increasingly, beaten-down job seekers are saying yes to lower-paying jobs after months of unemployment.
After working 17 years in the mortgage industry, Janice Hernandez was laid off twice in 2023 - first from her $90,000-a-year job as an account-relationship manager. Six months later, Hernandez accepted the only job she was offered, as a senior loan partner earning $54,000 a year. She was later laid off from that job, too.
"I had no choice but to take it because I needed [it] to work financially," Hernandez told MarketWatch. "I said, 'It's better than nothing.'"
Andrea Dean recently found herself in a similar situation. Dean, who lives in Melbourne, Fla., had 22 years of industry experience under her belt and was making $35.50 an hour as a conventional mortgage-loan underwriter before she was let go in August 2022. She started working a $19-an-hour logistics job last July. "I didn't care. I just needed to make money," she said.
When more workers are willing to take less money, that can drive pay levels down further, Yodh said. And many rounds of layoffs have resulted in a candidate pool filled with more-experienced white-collar workers. "In today's job market, there's no shortage of good quality candidates," he said.
Rubio hasn't given up on his search for a good job in human resources.
"You've got to look every day," he said. "The one day you don't look, that's the one day the job that you want is going to come out. Trust me."
-Zoe Han
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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05-03-24 1306ET
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