New Year, New Expectations: Lowest Average Annual Pay Workers Say They Are Willing to Accept is Now $73k, Fed Study Finds

 01/03/2023 CUToday

NEW YORK– The lowest average annual pay that workers were willing to accept from a new employer is $73,667, according to a new survey by the New York Federal Reserve Bank.

Known as a “reservation wage,” new figure reflects an increase of $794 over the bank’s July report and is the highest ever recorded since the survey’s inception in 2014.

According to the New York Fed, the increase in salary expectations was highest among job seekers under the age of 45.

But the report also found a difference between expectations and reality, with the average salary people were actually expected to receive coming in at $60,310, 18.1% lower than the higher expectation. Nevertheless, the figure was 5.4% higher than the Fed’s July survey and also the highest recorded since 2014. 

Additional Findings

Among other findings:

• The expectation of working past the age of 62 dropped to 48.8% from 50.1% in July, which is the lowest ratio recorded since 2014. That finding has been on a downward trend since November 2020.
• Those satisfied with their benefits and opportunity for promotion saw an increase between July and November. Satisfaction with benefits jumped from 6.6% to 63.2%,  while the perception for promotion climbed from 56.5% to 59.5%
• Satisfaction with wage compensation fell from 58.2% to 56.9%
• Among those employed four months ago, 91.8% were still employed. Those searching for a job increased from 24.0% to 24.7%, driven by respondents younger than 45 years old and those with a college degree.

A 10% Increase

Data from the Labor department in November showed wage growth rising at 5.0% pace, less than the average year-over-year consumer inflation rate of 8.0%. But the $73,667 lowest acceptable wage is nearly 10% higher than one year ago.