With people suddenly able to work for anyone from anywhere during the pandemic, lots of people changed jobs. When they did, the data shows they earned more money.
In a report from ADP, researchers found that wage growth among people who changed jobs increased 5.8% since June 2020. But they appear to be the exception since overall wage growth slowed by 2.3% in the second quarter.
"ADP data shows a rise in U.S. job switchers across industries along with increased wage growth for switchers," said Nela Richardson, chief economist at ADP.
Richardson said there could be a number of reasons for that. One possibility is employers increasingly had a difficult time finding talent and were willing to offer competitive compensation to get the people they wanted.
Hospitality workers didn’t benefit
But there was one area where job switchers didn’t benefit. Leisure and hospitality employees not only experienced the greatest job loss during the pandemic, but both job holders and job switchers are now earning lower wages on average compared to a year earlier.
Some of the biggest wage increases were provided to job switchers in mining and resource businesses, such as oil production. Their new jobs paid an average of nearly 12% more than the jobs they left.
Job switchers in professional and business services earned nearly 10% more in their new jobs and those who took new jobs in information services saw their salaries go up more than 9%.
Employment growth for all age groups increased as the economy continued to reopen and COVID-19 related restrictions were lifted in the second quarter. Younger workers got the most new jobs during the period.
Younger workers’ paycheck grew less
Workers 24-years-old and younger increased their employment by 13.5% last month. However, wage growth was lower among that age group.
The possibility of continued remote work could mean 2021 could see even more job switching. In a recent investigation, Slate interviewed a number of people who have already quit their jobs because they didn’t want to return to an office.
Employers may be reevaluating their return-to-office mandates in light of this trend. It not only might help retain their current workforce, it could also make it easier to recruit top shelf talent -- those willing to switch jobs if it means they continue working remotely.