Payday cash may be much smaller in new job market
The unemployed finding lower paying jobs
Payday cash may not be what it once was. David Becker of Wisconsin was laid off from his job in IT last year. It’s been a difficult time and he’s been looking for work in every place imaginable. He finally found a job, but it was in Nevada and the pay was $25,000 less than his old position. More and more unemployed workers are finding themselves in the same predicament. They take a job after months of searching, but have to accept considerably lower pay. People have been searching for employment for months now and with choices few and far between, they are settling for smaller pay, in return for security.
The new job market
In the recovering economy, one of the biggest problems is salary decline. Employers are starting to create new jobs, but being frugal with starting salaries, benefits, and incentives. Experts warn consumers that though there is research being gathered on the market, it doesn’t necessarily reflect the reality of what is happening. For example, the government reported that new jobs are being created. What they didn’t report was that those jobs are nowhere near the salary levels of pre-recessionary times. People, who used to earn $80,000 a year, may have to accept jobs for $50,000. That means they will have less money to spend, and less money to fuel the economy. Marisa DiNatale, director at Moody’s Economy.com, said, “In most cases, it means a subdued expansion, for sure.”
The long-term effect of lower salaries
People who are hired at lower salaries tend to lag behind for a long time. Playing financial catch-up is difficult. For example, a Columbia University study showed that workers laid off during the recession of the 80s earned 20% less than workers who weren’t laid off, even two decades after they were rehired.
The amount of payday cash workers have today is being hampered by employers, but employers are not necessarily to blame. They are like everyone else in the post-recession market wondering where the market is going and how quickly it will recover. DiNatalie added, “Employers are hiring, but cautiously. That probably is going to last for at least another nine to twelve months.”
Still the change in salary isn’t stopping people from taking lower-paying jobs. April Moore, an unemployed worker who took a job for 25% less than her former salary, said “I wanted the immediate security.” After being out of work for so long, many job seekers are finding themselves in the same position. They would rather have the security of any job at a lower pay rate, and then continue searching for a job that may not ever be found.
Hope for the future job market
Despite the change in salary, there is still hope for the job market. Traditionally, conservative pay is an offshoot of any decline in the market. Marco Von Wachter, a Columbia economics professor, said, “The first jobs to emerge from a recession typically are not well-paying ones.” Though payday cash may be lower, it is still a good sign that the job market is on the upswing. That is proof that the recession is over and the economy is starting to recover.