The classic supply and demand financial model may soon help improve your economic status. According to the U.S. Federal Reserve, the rising demand for skilled workers has the potential to drive salaries up throughout the country. Before you get too excited…
The Fed’s regional economics survey found that April through late May saw steady to stronger hiring. Due to increased consumer confidence/spending that led to job growth (which in itself led to more spending), the economy appeared to be in better shape than it was in early 2014. The only problem: even when jobs have been created in recent years, salaries have not seen an increase.
Why Would a Job Pay Better Now?
Companies are finding it increasingly difficult to obtain the right candidates for highly-skilled or managerial positions (especially those jobs with the highest levels of responsibility). However, not every skill set has equal footing in garnering enough demand to for its possessor to receive a higher-salaried job. The Fed has found that professional services, IT, engineering and some specific skilled trades, are your best bet for seeing more on your pay stub.
Despite years of steady job gains, overall wage growth remains relatively subdued across the U.S. But signs of rising wage pressures are emerging in the major cities that participated in the Fed’s survey — including Dallas, San Francisco and New York. They report that job seekers are receiving multiple offers, and employers are desperate enough to outbid the other offers.
If you are not skilled in one of the areas receiving the most attention, their gain could still be your’s as well. Traditionally, when more money is earned, more money is spent. When more money is spent, consumer spending rises and a new job is created or reshaped to reflect the upswing. Also, the skill hired today, may be the skill that leads to demand for you. This demand could lead to an increased salary for you.
The information above, as well as statistical data concerning the real estate market and other economic indicators, was made available ahead of the Fed’s next meeting on June 17-18 through its “Beige Book.”. The official’s composition of the book is particularly important because it influences decisions made during the meeting. The policies that spring from these numbers will give us a better understanding of the Fed’s perception of whether these trends are long-lasting or only temporary rebounds.