Seriously, there has not been a better time to ask for a raise, more vacation time or other benefits since the early 2000s. And because it’s getting tougher than ever to find good talent, employers need to re-examine how they treat their employees including with engagement, sense of purpose and accountability.
Indeed, the tables have turned since 2010. Then, employers were telling employees they needed to listen to their leaders, be accountable and do what they’re told or, if they didn’t like it, find a job elsewhere. Today, employees are in the drivers seat and are “firing” their employers at the highest levels seen since before the Great Recession. In March alone, 3.3 million people voluntarily quit their jobs, according to the U.S. Bureau of Labor Statistics. While some retired, most did this to work somewhere else.
This is due largely to the fact that unemployment has been decreasing just reached 3.8 percent, according to numbers out last Friday. This is the lowest unemployment rate since 2000. And before that you have to go back to the late 1960s to find a time the unemployment rate was lower.
To many Americans the economy still feels pretty ho-hum because they’re not getting that much more money in their paychecks. Wages in May were up 2.7 percent from a year ago, roughly in line with gains seen in recent months.
However, there are already some signs of that wage pressure building. A separate report released last week from the National Federation of Independent Businesses found that the number of small companies giving raises to workers is at its highest level since 1986. The NFIB says 35 percent of small-business owners say they are paying their employees more.
Closer to home, Twin Cities Business last month reported that of 245 business leaders from around Minnesota, 54 percent plan to increase wages beginning this quarter (July through Sept.), and 44 percent say they plan to hire more people during this period though it’s hard to find good talent: 61 percent say they expect it to get even harder in the months ahead to make these hires.
Meanwhile, Minneapolis is growing at its fastest pace since the 1950s, according to a recent MinnPost story. Between 1940 and 1950, Minneapolis added more than 29,000 people, an increase of 6 percent, according to U.S. Census data. By 2020, the Metropolitan Council projects that Minneapolis will have added about 40,000 residents since 2010, an increase of more than 10 percent. Meanwhile, for the past 70 years, growth has been the exception rather than the rule.
Also growing at fast rates are the economies of outstate communities such as Mankato, Rochester, Thief River Falls and to a lesser extent, Duluth and Bemidji.
Other reasons why it’s a good time to ask for a raise or improve your corporate culture include these recent statistics:
- Long-term unemployed (out of work 27 weeks or longer) is at its lowest level since 2007
- Underemployment rate is now 7.6%, lowest since 2008
- Layoffs or “flows of employed to unemployed” at the lowest level in more than 25 years
- The U.S. labor force participation rate, when adjusted for age (baby boomer retirees) is growing and may by year’s end reach peak levels seen during the late 1990s and early 2000s.
- Atlanta’s Federal Reserve is now forecasting GDP to grow by more than 4 percent, compared with most forecasts of slightly more than 3 percent.
- The unemployment rate for workers 25 years and older with less than a high-school diploma has dropped to 5.4%, down from 6.2% a year earlier, the lowest in 25 years.
- The unemployment rate for college grads clocked in at 2%, in line with the past couple of years.
- These and other factors are expected to increase to inflation, which in turn will increase average Americans’ cost of living, meaning higher wages will be needed even more than they have been during the post-Great Recession years, during which cost of living/inflation rose only at about 2 percent a year (which also is what the median pay increase was during that period).