(Bloomberg) — US employers could face a bill of almost $76,000 to bring a new worker aboard in tight labor markets, according to research by the Federal Reserve Bank of New York.
The so-called reservation wage — the lowest pay a worker would accept for taking a new job — rose to $75,811 a year in March, according to the New York Fed’s latest Survey of Consumer Expectations. That’s up about $2,100 from the bank’s last survey in November.
Keeping wages in check is a key goal for the Fed as it tries to cool inflation below its current 5% rate without triggering a recession. The central bank got some welcome news earlier this month, when the number of available positions in the US fell below 10 million for the first time since 2021.
Still, the New York Fed’s survey illustrates the tough task of taming expectations for pay and price increases.
Men especially are looking for top dollar. The reservation wage for men climbed to $88,900 in March, up $3,200 from the previous survey in November. Women, meantime, said they’d be willing to take a new job for $63,100, up by $1,400.
Another gap that has widened recently has been between those with a college degree and those without one. From the start of the pandemic through March 2022, the reservation wage for people with less than a college degree soared from $48,800 to $62,100, but it has declined slightly over the past year to $59,700.
Meantime, those with at least a college degree now demand $97,300 a year, up from $81,800, with their reservation wage continuing to increase over the year.