Workers feel good about the economy because they value stability over wage growth.
By Conor Sen
One of the anomalies of the current U.S. economy is that workers seem more satisfied with it than economists are. It comes down to their view of the labor market: Workers are right to welcome its stability, and economists are right that wage growth is lacking.
Economists have two main data points in their favor. Wage growth is currently at about 3 percent, compared to 4 percent during the strong parts of the past two cycles. And the employment-to-population ratio for workers aged 25 to 54 still hasn’t returned to its high from the last cycle, let alone the all-time high from 2000.
Despite this “hard economic data,” the “soft economic data” — public sentiment — shows that the economy and labor market are perceived to be about as good as they’ve ever been. Gallup has been asking the public every month since 2001 what it considers the nation’s most important problem, and in November only 13 percent responded with an economic problem. The just-completed midterm elections were largely a referendum on health care and President Donald Trump, not on the economy.
Job market sentiment continues to outpace the hard economic data as well. The Conference Board’s monthly consumer confidence survey in November showed that 46.6 percent of respondents say jobs are “plentiful,” compared to only 12.2 percent who say that jobs are hard to get. The last time that differential was so great was during a two-year period from 1999 to 2001.
Given the choice between today’s labor market and 1999’s, I would take today’s. The labor market of the late 1990s was hot, but it was also unstable, fueled by speculative technology companies and investments. Today’s labor market may not be quite as robust, but what it lacks in strength it makes up for in stability.
As a worker, I’d rather be in a labor market with lots of job postings, a low level of jobless claims and a sustainable level of wage growth. It’s certainly preferable to being in one fueled by speculative excess, where I have to constantly worry about when the mania is going to collapse. I’ll take 3 percent wage growth today with good prospects for being employed tomorrow over 4 percent wage growth today and unemployment tomorrow.
There remains an unresolved debate about what central banks should have done in response to the dot-com boom of the late 1990s and the housing boom of the mid-2000s, two cycles marked by excessive speculation but acceptable levels of inflation. Were there ways to curb the excesses without harming the labor market or the economy at large? Given the lack of above-trend inflation, should the Federal Reserve have run looser monetary policy, supporting the labor market even if it meant even wilder, potentially destabilizing levels of speculative excess? In cycles like that, policy errors may have been unavoidable.
The good news for workers today, and perhaps why their optimism is higher than some economic data might suggest, is that there’s no reason why this labor market can’t continue for at least several more quarters. The excesses of the past couple years have been in financial markets, not in the real economy. Bubbles in cryptocurrencies, cannabis and private technology companies should not lead to a heavy-handed response from the Fed. Household leverage remains low, and business investment remains modest.
In 2019, a labor market with an unemployment rate below 4 percent and slightly higher wage growth may not be enough to satisfy those who are fixated on the economic performance of 1999. But most workers would probably take it.
Posted by Amy Elisa Jackson
You’re 96% sure that you are ready to schedule a meeting with your boss to ask for a raise. Or perhaps you’re nearing the end of the job interview process and an offer is in sight. However, if you’re like me, you have definitely put your foot in your mouth a time or two saying the wrong thing at the absolute worst moment. Doh!
Don’t mess up.
Don’t mess up.
No matter how many times you rehearse what to say, there’s always that risk of fumbling right at the five-yard line. Instead of panicking, get prepared.
To coach us along in the salary negotiation process, we turned to Josh Doody, author of Fearless Salary Negotiation. “A salary negotiation is a collaboration, and a key ingredient of a successful collaboration is good communication,” says Doody. “It’s important to be very clear with what you communicate to avoid ambiguity, which could complicate things and slow the negotiation process.”
Instead of Doody simply sharing the things you should say, he’s here to warn you about the potential negotiation landmines to avoid when angling for the salary you deserve. Here are 9 things to never say in a salary negotiation:
The most common question recruiters will ask a candidate is something like, “So where are you right now in terms of salary, and what are you looking for if you make this move?” Don’t fall for it.
“I call this The Dreaded Salary Question and it’s tricky because it usually comes up early in the interview process, and most candidates don’t think of it as part of a salary negotiation even though it is,” says Doody. “Answering this question by disclosing numbers can make it very difficult to negotiate effectively later on because it can box the candidate in. Once they disclose current or desired salary, the offers they get are very likely to be tied to those numbers. That can be very expensive if the company might have offered them a much higher salary than they disclosed.”
Don’t disclose your current or desired salary! “Recovering from this mistake can be tricky and each situation is unique. But one way to untether from those original numbers is to review the benefits package for deficiencies,” says Doody. “If the health insurance offering, paid vacation, target bonus or other aspects of the benefits package are underwhelming, the candidate can use those as reasons to ask for a higher salary to compensate.”
Instead, try something like :
I’m not comfortable sharing my current salary. I would prefer to focus on the value I can add to this company rather than what I’m paid at my current job. I don’t have a specific number in mind for a desired salary, and you know better than I do what value my skill set and experience could bring to your company. I want this move to be a big step forward for me in terms of both responsibility and compensation.
According to Doody, “negotiating is uncomfortable, and our natural tendency is to try to smooth the edges on a difficult conversation. Saying sorry could signal to the recruiter or hiring manager that you might be willing to back down, and that could be expensive. Don’t apologize for negotiating.”
“You want to continuously improve your situation throughout the negotiation and you do that by avoiding negative language and focusing on positive language. Instead of “No, that doesn’t work for me.” (two negative words) you can say, “I would be more comfortable with…” (positive words). Negative words slow things down and may put up walls that make collaboration difficult. Using only positive words is difficult at first, but you’ll get better with practice.”
While this may sound like the exact word to use when speaking to a recruiter, Doody insists it should be used with caution. “You’ll often get a job offer that seems really appealing, and it might be far more than you expected. Your instinct, in that case, might be to just accept the offer because it’s so good.”
But is it too good?
“It’s possible you underestimated your value in this situation. Instead of “Yes”, formulate a counter offer to see how much you can improve it. The negotiation should end with the company saying “Yes” to you. Once they say “Yes” to you, or you run out of things to ask for, then you are finished negotiating.”
Procrastinators, this one is for you. “Sometimes it’s easier to avoid uncomfortable parts of a negotiation by deferring those parts of the conversation until after you’re hired. That can be a very expensive mistake because you won’t have the same latitude to negotiate and improve your position once you’re in the door. Push through the discomfort and get the best possible result now,” Doody advises.
“Try is a passive word that leaves a lot of wiggle room, and you don’t want that,” insists Doody. “It’s easy for someone to say — honestly or not — “We’ll try…” and reply with, “We tried and it just didn’t work out.” Don’t ask them to “try” to do something. Instead, use more positive language like “I would be more comfortable with.”
While this word seems counter-intuitive because you are negotiating to get more, it’s a word that is too general for a successful negotiation. Instead of asking for “more” salary or “more” vacation, this is your time to get specific.
“Don’t leave things to the imagination once you’re negotiating. Instead of “Could you budge on the salary?”, say, ‘I would be more comfortable with a base salary of $105,000.’”
Lastly, the word “want” can tank negotiations. Using it can undercut the entire premise of your argument that you deserve to be paid more and you deserve a more competitive salary. Go into a negotiation with facts and figures, making a compelling case. Start with printing out the results of your personal salary estimator, Know Your Worth. See what you base salary should be and see what the industry norms are.
“You could talk about what you want, which just isn’t all that important. Or you could talk about what the company wants, which is not as potent as talking about what the company needs, which are the most important thing,” adds Doody. “Focus on the company’s needs and how you can help meet those needs so they can easily see your value and work to compensate you for it.”
This was originally published by the Dayton Business Journal on Oct. 30, 2018. Click here for the original link.
For those seeking employment, the Dayton region is a fine place to be. That’s the word from the latest figures from the state of Ohio.
The Ohio Department of Job and Family Services reports 16,800 job openings were posted in the 14-county Dayton and west Ohio regions from Aug. 14 to Sept. 13. This marks a jump of 190 jobs from the previous period, and a boost of 1,025 job adds from last year.
The data sheds light on the large number of open jobs and the companies and sectors seeking workers.
Topping the list was Kettering Medical Center with 900 job postings, followed by Lowe’s with 187 listings and Crown Equipment (176).
Other top job seekers included Dayton Children’s Hospital (175), Northrop Grumman (162) and Mercy Health (156).
(Note: The data comes from research via nonprofit The Conference Board and may not include all sources of data for open jobs.)
In terms of salary, 14 percent of these open positions pay less than $30,000 a year; 19 percent pay up to $50,000 a year; and 42 percent pay up to $80,000 a year. About 25 percent pay more than $80,000.
About 33 percent of the jobs posted require a GED or high school-level education; while 42 percent require an associate’s degree. Twenty-two percent require a bachelor’s degree, and about 4 percent require graduate education.
It sounds silly, but if you don’t speak up, your boss likely will assume that everything is great. Don’t just set up a meeting and ask for more money. Arrange an appointment and lay out a case for yourself.
List your accomplishments and why you should be paid more. It’s fine to mention that wages have gone up across your industry, but that should only be a small piece of your argument.
If your boss tells you he or she believes your work doesn’t merit a raise, don’t let that stand. Ask for specific areas for improvement and for regular progress meetings.
In the case where you’re told “there’s no money in the budget,” ask for a promised raise to be worked into the next budget. If your boss agrees, try to get a specific amount negotiated or the promise of a meeting before budget season.
Look for a job with the idea that your preference would be to stay, but that you’re willing to leave. You may surprise yourself and find a much better situation. It’s also possible you’ll get a better offer that you can bring back to your current employer.
This isn’t a well to go to often, and it’s not one to undertake without considering the consequences. If you use this tactic, you may find that your employer doesn’t want you at a higher price — or that nobody is willing to pay you one.
In my first job, I went from a low-level part-time assistant to managing editor of a magazine in one move. As you might imagine, I was paid way less than the previous managing editor. Even though I received nice raises on a percentage basis, I still made much less than other comparable editors.
Since my boss wasn’t going to give me a $20,000 raise, my only real option was to leave. When I did, I got somewhere near market value because to the new company, I wasn’t a young kid who got a big job he may not have deserved. I was an experienced editor with a lot to offer.
It’s important to understand your worth and take an active role in managing your career. That doesn’t mean you have to job hop or eke out every nickel possible. Instead, find a company that values you and pays you a fair wage so that you can be professionally satisfied.