Adrienne Heintz, an Atlanta marketing professional, has discovered a reliable way to earn higher wages and Federal Reserve economists are taking note.
The Auburn University alumnus changed jobs twice over the past two years and nabbed raises of 10% and 8% as a result. “Switching positions internally or externally is definitely the fastest way to a larger salary,” the 28-year-old tells Bloomberg.
She isn’t alone in her approach, as a growing number of Americans are changing employers in search of more money. The trend is attracting the attention of labor economists, who are increasingly studying how job-hopping Americans drive compensation gains.
The new focus comes at a time when the long-held theory that the unemployment rate can help forecast moves in wages and inflation is coming under scrutiny.
Studying the impact of job changes “is a more nuanced and deeper analysis of labor markets and gives you a better picture of what’s really going on,” says James Bullard, president of the St. Louis Federal Reserve Bank. “Look at the late ’90s: Unemployment went down to 3.8 percent and we didn’t get all that much inflation.”
Economists led by Jason Faberman at the Chicago Fed are delving into the impact of job searches, and have studied data from 2013 to 2015. They found that 23% of employees are actively looking for another job on any given week, putting in four or five applications over a four-week period. In addition, employers are poaching workers, as 27% of offers to the employed are unsolicited, according to the study’s authors.
And according to the Atlanta Fed’s wage tracker, which monitors wages of continuously employed workers, Americans who are willing to change jobs do benefit. The data showed job switchers earned 4.3% more money in July 2016 than a year earlier, while people who remained in the same job enjoyed only a 3% increase.
