The Great Resignation could cost you dearly.
- Companies are struggling to retain workers these days.
- Employers are offering higher wages to cope with high quit rates, but that could be a bad thing for ordinary consumers.
We’ve been in the throes of the Great Resignation for many months now, and it’s easy to say that’s a good thing for workers, because it effectively means they have the upper hand in the job market. today. In February, 4.4 million workers left their jobs. And while that’s not as high as the record 4.5 million people who quit their jobs in November, it’s a pretty significant number.
In total, in February, the US labor market had 11.3 million vacancies to fill. And companies are now scrambling to deal with high quit rates by raising wages for current and potential workers.
At first glance, this may seem like a good thing. But the big quit could end up hurting ordinary consumers for one important reason.
Wage increases are not absorbed by companies alone
It is true that in today’s job market, candidates have more bargaining power. It’s a positive thing. But the fact that employers are backed by a bit of a wall on the salary front is also a negative thing.
Firms do not tend to simply absorb the cost of higher wages. Instead, they tend to pass that cost on to consumers.
Now, you might have noticed that the cost of daily living is on the rise in all areas these days. This is partly due to supply chain issues and a high level of consumer demand. But one of the main reasons the cost of goods and services is rising is because businesses are spending more money on labor and therefore charging consumers more to compensate. And if dropout rates continue to rise, it could end up impacting your finances.
How to deal with rising prices
These days, many people are struggling to make ends meet with the rising cost of living. If you’re having trouble paying your bills, it might be time to cut your budget until day-to-day expenses go down. This could mean temporarily canceling cable or forcing you not to dine out.
Another option? Take a side scramble. Those companies that pay higher wages? You could take advantage of this by snagging a side gig that pays handsomely. This could, in turn, make it easier to pay your bills and inflate your savingsstyle=”text-decoration: underline”> in case the cost of living continues to rise.
You can also cope better with higher living expenses by using credit cards strategically. If soaring gas prices are hurting your budget, for example, be sure to fill up your car with a card that gives you extra cash back at the pump. And if none of your existing cards offer this benefit, consider applying for a new one.
It’s great that workers have so many options these days when it comes to finding a job and demanding a more generous salary. But higher dropout rates could also impact your personal finances. It’s important to do what you can to weather this period of higher cost of living and prepare for even higher costs if quit rates continue to climb.
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