WASHINGTON (CN) — Undercutting the pandemic-era belief that staff shortages from the Great Resignation have put employers over a barrel, Treasury officials said Monday that the data are instead painting a shadow of wage depression.
President Joe Biden catalyzed the study on the state of American labor in a July executive order. The resulting 77-page report condenses years of independent research on competition in the labor market and says workers have lost an average of 15% to 25% of the wages they would make in a competitive-rich market since employers rarely have to compete to entice or keep workers.
How companies have been able to largely avoid doling out worker wage gains is attributed to several phenomena in the report, including the widespread use of noncompete clauses in contracts, mandatory arbitration requirements, and working climates that discourage public disclosure of salaries and wages.
Workers typically have opportunities for higher wages when they move to a new company or position, or when they leverage a job offer for a raise at their current company. But when companies have agreed not to poach each other's workers, or an employee has signed a noncompete clause banning them from working for companies in the same field as their current employer, opportunities for wage growth can become slim to none, the researchers explain.
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