Switching jobs used to mean a big raise. Not anymore.
Key takeaway from the latest report:
• Job switchers are seeing about ~4% median pay increases
• During the 2022 “Great Resignation,” raises were often 14–16%
• The pay gap between job switchers and job stayers is now the smallest since 2020
What this means for new graduates:
• Companies are hiring more cautiously
• Large pay jumps from job hopping are less common
• Early career focus should be on skills, experience, and growth—not just salary
During the pandemic hiring boom known as the "Great Resignation," switching jobs often meant a sizable pay raise.
These days, there's less financial upside to making the move, and more workers are choosing to stay put — a trend economists call the "Great Stay."
Workers who switched jobs in January saw median pay increases of about 4%, according to a recent Bank of America Institute analysis of payroll deposit data. That's less than a third of the roughly 14% raises seen at the peak of the pandemic hiring boom in 2022 and less than half of what workers typically gained from switching jobs in 2019. The measure reflects the change in pay in the three months after a job move compared with the same three months a year earlier.
It’s hard to use any other word to describe this job market than “tough.”
Last week’s February report showed a loss of 92,000 jobs. About 1 in 4 people who’ve been out of a job have been unemployed for more than six months. Hiring is even lower than it was before the pandemic rattled markets.
And you might not realize it, but tough labor markets hit more than just those looking for work. They hurt the people who already have jobs, too.
Think back to 2022: During the "Great Resignation," workers had the upper hand. If you didn’t like your pay, you walked across the street for a 10% raise, sometimes more.
Today, the driver’s seat has a new occupant. When hiring slows and companies stop “backfilling” roles, your bargaining power goes with it.
That’s exactly what came to mind when I saw data from PayScale that showed 48% of companies were planning “peanut butter” raises, or across-the-board, “uniform” salary bumps. Sure, they can be a way to reduce bias, but they often fail to reward high performance and, perhaps most importantly, keep up with the cost of living.
There is a "hidden tax" in this economy that doesn’t show up in the CPI: The Slack. When your coworker leaves and the company doesn't hire a replacement, their responsibilities don't just vanish. They land on your desk. You’re doing 1.5 jobs for 1.0 times the pay. In a tight market, companies don't have to work as hard to keep you, and they know it.
And a weakening labor market leaves scars on your financial foundation, the same way high inflation does. When your income stagnates, but the cost of living keeps climbing, your financial goals — whether that’s finally buying a home, padding your emergency fund, or just breathing easier at the grocery store — can feel like they're slipping further out of reach. Adding further insult to injury, our latest data shows that 1 in 4 (24%) of Americans have no emergency savings at all.
How is the slowing labor market showing up in your career?