Welcome to the era of low expectations.
While the U.S. economy showed some signs of improvement last year, many American workers are not feeling these improvements when it comes to their careers, according to a new poll conducted by Op4G for MoneyRates.com.
The results indicate that Americans see themselves facing a workplace reality of low wages and shaky job security. Workers also seem to be resigning themselves to this environment, as most plan on keeping their current jobs if they can.
The challenges for today's workers
The MoneyRates.com poll asked more than 1,200 adult Americans about compensation and job security issues. Here are some of the major trends that emerged from the responses:
- Raises were low last year, and will probably be low this year. Most Americans (56.25 percent) got by with the same or lower wages in 2013 as in 2012, including the 11.72 percent of respondents who reported taking a pay cut. In fact, Americans last year were about three times as likely to take a pay cut as they were to enjoy a raise of more than 10 percent. The poll suggests little improvement ahead in 2014, with 50.11 percent of respondents expecting their wages to be the same or lower this year.
- A significant portion of the workforce suffers from job insecurity. What is worse than taking a pay cut? Losing your job altogether, which nearly a quarter of respondents feel has a significant chance (greater than 10 percent probability) of happening to them. Less than 40 percent of Americans feel highly confident in their job security, with that portion of respondents feeling they have less than 1 percent probability of losing their jobs this year.
- They may not like the wages, but most people are determined to hang onto their jobs. The pay may not be much, but people are beginning to understand that they cannot take getting a new job for granted. More than half of poll respondents (55.39 percent) put their likelihood of quitting their jobs in 2014 at less than 1 percent. Only 3.3 percent of respondents believe they will probably quit their jobs this year. In a period of higher pay increases, you could chalk this up to job satisfaction, but under the circumstances, it seems more likely the result of a perceived lack of opportunity.
For a great many Americans, this economic recovery has not meant a return to prosperity. They are still in survival mode.
Interestingly though, some of the job insecurity people are feeling may be overblown. According to the Bureau of Labor Statistics, quit rates are routinely running higher than the rate of layoffs and discharges.
How to give yourself a fighting chance
In an environment of meager raises and scarce job security, making smart financial and career decisions becomes especially important. Here are some ways you can fight back:
- Keep your job skills up to date. Technology and globalization have accelerated the pace of change. You need to stay current so you are adding the value necessary to earn decent raises at your current job, and so you have marketable skills in case you lose that job.
- Follow the job market. Even if you are not looking for a job, you should periodically scan employment websites to get a feel for what the market is like. The level of demand for your particular skill set will tell you how confident you should be about asking for a raise, and it might also lead you toward more rewarding opportunities.
- Build your emergency savings. The average stint of unemployment today lasts about 17 weeks, so people who are less than absolutely confident in their jobs should build their savings accounts up to help cover expenses for at least that long.
- Keep your budget in line. While wages are stagnant for many people, expenses always seem to have a way of creeping up. The best way to keep from losing ground is to actively attack your expenses and try to drive them down. In particular, focus on things that can make a big difference, such as checking for refinancing opportunities and getting competing quotes on your insurance every year.
- Make your money work smarter for you. Once you start saving money, that money can go to work for you, but make sure it is working intelligently. Be diligent about minimizing 401(k) fees, insist on a free checking account (yes, they still exist) and shop for higher rates on your savings accounts.
It's tough to make a living these days, but American workers are known for their toughness. As people learn to manage their individual job and financial situations more intensely, the collective effort may well put the nation as a whole on a more competitive footing.
The original article can be found at Money-Rates.com:Job insecurity: the American worker's reality