How Salaries Changed In 2021
2021 was an unpredictable year for the job market. With increasing work from home (WFH) positions, The Great Resignation, and the lasting effects of COVID-19, no one could accurately predict how the year would play out. Here is a synopsis of the past 12 months dealing with jobs, unemployment and salary adjustments.
Jobs Added
Employers added an average of 537,000 jobs per month in 2021, and the unemployment rate fell to 3.9% in December, 2021 to end the year.
Jobs added and unemployment rate played a large role in determining salary changes of the past year. The weekly median earnings for full-time wage or salary workers in the United States in 2021 came out to $990. This roughly translates to a yearly income of $51,480, according to the Bureau of Labor Statistics. In 2020 the average salary, according to the BLS, was $56,310. That is a $4,830 decrease in average salary. 2020 lost a net 9.7 million jobs, surpassing the previous record of 5.3 million jobs lost in 2009. So, 2021 may have added roughly 5.3 million jobs, but the national salary average was less than it was during peak COVID-19.
Unemployment
The average unemployment rate for 2021 was 5.3%. The unemployment rate has been on a steady decline since the beginning of 2021. Average hourly earnings rose 0.6% in December 2021 from the prior month, matching the largest advance since April, 2021. The slight advance in December was led by leisure and hospitality payrolls, which reached 53,000. So, the unemployment rate decreasing has heavily impacted the 2021 salary changes.
The Great Resignation
The Great Resignation was a key factor for salary changes. People focusing on their mental health and leaving jobs with no future plans has left employers in a delicate situation, causing them to increase salaries for employees as an incentive to stay in the workforce. WFH positions has been another way employers have been combating these effects. However, it is difficult to decide a salary for these positions because these roles are relatively new to the workforce and some people are saying WFH employees do not deserve the same pay as traditional in-person employees. 2022 will be an interesting year regarding WFH positions and the candidate pool.
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