Newsflash: Supply And Demand Works In The Job Market Too

Curse you, Adam Smith and your invisible hand: Competition between the many, many unemployed Americans for the very few open jobs is allowing employers greater leeway to negotiate on pay and benefits, according to a survey from the Society for Human Resource Management (SHRM).

“Nearly 15 percent of service-sector companies reduced pay and benefits for new hires in April compared with March, the survey found. Only 2 percent increased such compensation. The rest made no change in new-employee pay or didn’t hire at all.” Service companies, like retail, hotel, and financial industries, have typically had to offer competitive pay up until this spring, SHRM said.

About five workers are competing, on average, for every job opening, compared to fewer than two a year ago. Competition—or a glut of “supply” in the workforce—means wages go down. Not terribly surprising, all in all, but just another indicator of our troubled times.