NEW YORK – The Federal Reserve Bank of New York' Center for Microeconomic Data today released the July 2020 SCE Labor Market Survey, which shows a rise in transitions into unemployment and a decline in employer-to-employer transitions, compared to a year ago. Regarding expectations, the average expected likelihood of receiving an offer in the next four months declined sharply while the average expected wage offer (conditional on receiving one) remained largely unchanged. The average reservation wage—the lowest wage at which respondents would be willing to accept a new job—increased year-over-year. Expectations regarding job transitions displayed a broad-based worsening.
Experiences
- Among those who were employed four months ago, 88.9% were still employed, compared to 93.3% last July. This decline was due to a rise in transitions into unemployment from 2.8% in July 2019 and 5.7% in March 2020 to 10.5%—a series high—in July 2020. The increase in transitions into unemployment was most notable for respondents over age 45, those with household income of less than $60,000, and women. Employer-to-employer transitions also declined from 6.2% in July 2019 to 4.4% in July 2020.
- The proportion of individuals who reported searching for a job in the past four weeks fell from 24.5% in July 2019 to 19.6% in July 2020. The decline was driven by respondents below the age of 45 and those without a college degree.
- 13.5% of individuals reported receiving at least one job offer in the past four months, significantly down from 21.0% in July 2019. The series had followed an increasing trend from March 2018 until the effects of the COVID-19 pandemic began to materialize in March 2020. On the other hand, the average full-time offer wage received in the past four months increased from $54,943 in July 2019 to $62,911 in July 2020.
- Satisfaction with wage compensation, with nonwage benefits, and with promotion opportunities at respondents' current jobs all slightly increased from July 2019 values, reaching 60.4%, 65.1%, and 49.5%, respectively.
Expectations
- Expectations regarding job transitions over the next four months among those currently employed largely worsened, with the average expected likelihood of moving into unemployment increasing from 2.0% in July 2019 to 3.7% in July 2020 and the average expected likelihood of moving to a new employer decreasing from 11.4% in July 2019 to 8.6% in July 2020. The worsening in expectations was broad-based across age, gender, and income groups.
- The average expected likelihood of receiving at least one job offer in the next four months declined sharply from 24.1% in July 2019 to 18.5% in July 2020.
- Conditional on expecting an offer, the average expected annual salary of job offers in the next four months essentially remained unchanged at $54,646.
- The average reservation wage—the lowest wage respondents would be willing to accept for a new job—increased from $62,194 in July 2019 to $64,226 in July 2020. The increase was most pronounced for younger respondents (below the age of 45) and men. Conversely, the average reservation wage for respondents over the age of 45 and those with household income of over $60,000 each declined.
- The average expected likelihood of working beyond the age of 62 ticked down from 52.7% in July 2019 to 51.9%, nearing its lowest reading of 51.1% recorded in March 2018. The average expected likelihood of working beyond the age of 67 also declined from 35.3% in July 2019 to 34.1%.
About the SCE Labor Market Survey
The SCE Labor Market Survey, fielded as part of the Survey of Consumer Expectations (SCE) since March 2014, provides information on consumers' experiences and expectations regarding the labor market. Every four months, approximately 1,000 SCE panelists are asked details about their current (or most recent) job. Respondents are asked about job transitions, and about their job search effort and outcomes (number of job offers and offer wages), over the last four months. The currently employed are also asked about their level of satisfaction with wages, non-wage benefits, and their prospects for advancement at their current job. In addition, the survey elicits respondents' expectations about job transitions over the next four months. Respondents are asked about the likelihood of receiving at least one job offer over the next four months, the expected number of offers, and the expected wages for these offers. The survey also elicits the respondents' "reservation wage" and retirement expectations.
More information about the SCE survey goals, design, and content can be found on the webpage for the Center for Microeconomic Data.
