Americans’ lowest pay level to take new job nears $73K

Reservation wage survey reveals wide gender split.

The average reservation wage, orthe lowest pay level that Americans would be willing to accept for a new job, rose by 5.7% from a year earlier to $72,873 in July, according to the latest labor-market survey by the Federal Reserve Bank of New York, as soaring prices change the calculus for workers.

The self-reported reservation wage has climbed faster among men and younger workers since the pandemic began, according to the New York Fed’s survey, which is conducted three times a year. The overall figure was down slightly from a series high of $73,283 in the last study in March.

Inflation at close to four-decade highs has eaten into the purchasing power of U.S. employees, and most of them have seen a decline in real incomes over the past year. While job openings have dropped from record levels, there were still 10.7 million positions available in June, allowing workers some bargaining power. A record 22 states reported jobless rates at or below 3% in July, an indication of how tight labor markets have become.

The reservat i on wage reported by Americans with less than a college degree, and those age 45 or younger, has risen by more than 23% since March 2020 when the pandemic began, according to the New York Fed.

The latest survey showed a widening split by gender. The reservation wage for men jumped to $86,259, while for women it declined to $59,543.

The new survey showed plenty of job-search activity, with 21.1% of respondents reporting that they received at least one job offer in the past four months, up from 18.7% a year earlier. It also found signs that Americans see their working lives getting shorter. The expected likelihood of working beyond age 62 dropped to 48.8%, from 50.1% a year earlier, extending a downward trend that began 2020.