The Great Resignation could be costing you.
- Companies are struggling to retain workers these days.
- Employers are offering up higher wages to address high quit rates, but that could be a bad thing for everyday consumers.
We’ve been deep in the throes of the Great Resignation for many months now, and it’s easy to argue it’s a good thing for workers, because it effectively means they have the upper hand in today’s labor market. In February, 4.4 million workers quit their jobs. And while that’s not quite as high as the record 4.5 million people who quit their jobs in November, it’s a pretty sizable number.
All told, as of February, the US labor market had 11.3 million job openings to fill. And companies are now scrambling to address high quit rates by raising wages for existing and prospective workers.
At first glance, that may seem like a good thing. But the Great Resignation could end up hurting everyday consumers for one big reason.
Wage hikes aren’t absorbed by companies alone
It is true that in today’s job market, applicants have more negotiating power. That’s a positive thing. But the fact that employers are somewhat backed against a wall on the wage front is also a negative thing.
Companies do not tend to just absorb the cost of higher wages. Rather, they tend to pass that cost onto consumers.
Now, you may have noticed that everyday living costs are up across the board these days. Part of that is due to supply chain issues and a high level of consumer demand. But a big reason the cost of goods and services is up is that companies are spending more money on labor, and so they’re charging consumers more to compensate. And if quit rates continue to spike, it could end up impacting your finances.
How to cope with rising prices
These days, a lot of people are struggling to make ends meet in the face of higher living costs. If you’re having a hard time paying bills, it may be time to make cutbacks in your budget until everyday expenses come down. That could mean canceling cable temporarily or forcing yourself not to dine outside the home.
Another option? Pick up a side hustle. Those higher wages companies are paying? You could take advantage of them by snagging a side gig that pays generously. That could, in turn, make it easier to pay your bills and pad your savings in case living costs continue to spike.
You can also better cope with higher living expenses by using credit cards strategically. If soaring gas prices are hurting your budget, for example, make sure to fill up your car using a card that gives you extra cash back at the pump. And if none of your existing cards offer that benefit, consider applying for a new one that does.
It’s great that workers have plenty of options these days when it comes to finding a job and commanding a more generous wage. But higher quit rates could also impact your personal finances. It’s important to do what you can get through this period of higher living costs – and brace for even higher costs if resignation rates continue to spike.